Stablecoins

Market state

RWA.xyz recorded total stablecoin market capitalisation of $297.98bn on 25 July 2026, down 0.06% over 30 days, across 123 stablecoins held by 277.11m addresses, up 3.24%. Monthly transfer volume was $5.37trn, down 22.85% over 30 days, and monthly active addresses were 53.48m, down 2.15%.

DefiLlama, accessed the same day, put the total at $312.14bn, up 0.27% over seven days and down 1.07% over 30 days, with Tether dominance of 58.99%. The roughly $14bn gap between the two trackers is a methodology difference, not a data error: the platforms differ in which yield-bearing and synthetic dollar tokens they include and in chain coverage. Any stablecoin figure should be cited with its source and its inclusion rules.

Supply is concentrated in two issuers. On RWA.xyz's 25 July 2026 reading, Tether's USDT stood at $189.3bn and Circle's USDC at $72.6bn, followed by Sky's USDS at $6.6bn, DAI at $4.6bn, Ethena's USDe at $4.2bn, USD1 at $4.2bn, PayPal USD at $2.7bn and Ripple USD at $1.5bn. DefiLlama's readings for the two largest were $184.12bn and $73.41bn.

Reserve composition is disclosed at the issuer level. Tether's Q1 2026 attestation by BDO, as of 31 March 2026, reported total assets of $191.77bn against $183bn of token liabilities, including $141bn of direct and indirect US Treasury exposure, $20bn of physical gold and $7bn of bitcoin, with an excess reserve buffer of $8.23bn and quarterly profit of $1.04bn.

The direction of travel in the data is notable: supply has been flat to slightly lower over 30 days while transfer volume fell more than 20%, so the market is holding rather than moving balances.

Market structure

Three backing models with different risk profiles trade at the same nominal peg. Fiat-reserve issuers - Tether, Circle, Paxos, Ripple - hold Treasury bills, repo and cash, mint against incoming dollars and redeem at par for approved counterparties, earning the spread between reserve yield and a zero-coupon liability. That spread is the entire business: Tether reported $1.04bn of profit in the first quarter of 2026.

Over-collateralised issuance, now consolidated in Sky's USDS and DAI, mints against crypto and tokenised collateral with liquidation mechanisms and a governance-set savings rate. Synthetic dollars such as Ethena's USDe hold spot crypto against short perpetual futures and pass funding-rate income to holders; their stability depends on derivatives market conditions rather than on a redeemable reserve.

Redemption at par is available only to onboarded institutional counterparties. Everyone else transacts in secondary markets, so the peg most users experience is an exchange price maintained by arbitrageurs who do have redemption access. Distribution runs through exchanges, wallets and payment providers, and network choice is set by cost: USDT supply concentrates on Tron and Ethereum, USDC across Ethereum, Solana, Base and others.

Stablecoin issuers are now material buyers of short-dated US government debt - Tether alone reported $141bn of Treasury exposure as of 31 March 2026 - which links the token market directly to money-market conditions and makes reserve management a monetary-policy-relevant activity.

Risks

Redemption is the core exposure. A reserve-backed token is a demand liability against a portfolio that must be sold to meet outflows; if outflows exceed the liquid sleeve, the issuer either gates redemptions or sells into a falling market. Excess reserves are the buffer, and Tether's was $8.23bn against $183bn of liabilities as of 31 March 2026 - approximately 4.5% of outstanding.

Disclosure is attestation rather than audit. An attestation confirms balances at a point in time under agreed procedures; it is not an opinion on financial statements or on internal controls, and the distinction matters for a $189bn liability.

Concentration is structural. Two issuers account for the large majority of supply, so a failure at either would be a systemic event for onchain markets, and both are exposed to the same short-dated Treasury and repo markets.

Synthetic dollars carry a different risk: negative funding regimes or a derivatives venue failure would break the hedge that maintains the peg, and holders have no redeemable reserve to fall back on.

Other exposures: secondary-market discounts during stress even where reserves are sound; sanctions and illicit-finance liability, addressed by proposed Treasury and OCC rules in 2026; deposit disintermediation, which is the explicit motivation for the US banks' shared tokenised deposit network; and the treatment of yield-bearing tokens, which sit outside the GENIUS Act's payment-stablecoin definition and therefore outside its reserve and redemption requirements.

Regulatory treatment

United States: the GENIUS Act became effective on 18 July 2025 and is being implemented through rulemaking. The OCC issued a notice of proposed rulemaking on 25 February 2026 creating a new 12 CFR Part 15 for payment stablecoin activities and amending capital, prompt corrective action, fees and rules-of-practice provisions, covering reserves, redemption, risk management, custody, capital and liquidity, audits, reports and supervision, and applying to national banks, Federal savings associations, Federal branches, foreign issuers and non-bank entities approved as Federal or State qualified payment stablecoin issuers under OCC jurisdiction. A further OCC proposal addresses anti-money-laundering, counter-terrorist-financing and sanctions compliance. The FDIC's proposed requirements for FDIC-supervised permitted payment stablecoin issuers were published in the Federal Register on 10 April 2026, and Treasury proposed both a rule implementing the Act's illicit-finance requirements and principles for assessing acceptable state stablecoin regimes. The statutory compliance date is the earlier of 18 months after enactment or 120 days after the primary Federal payment stablecoin regulators issue final rules.

European Union: MiCA has been in force since 30 December 2024. As of 12 March 2026, 29 e-money tokens had been authorised across 19 issuers - 17 euro-denominated, 9 US dollar-denominated, and one each in Czech koruna, sterling and Swiss francs - with France hosting the most issuers, including Circle's EU entity and Societe Generale-Forge. No asset-referenced tokens had been authorised. More than 40 crypto-asset service provider licences had been issued, and the Commission has proposed centralising their supervision at ESMA.

The key definitional boundary in both regimes is that a bank deposit token is not a payment stablecoin, and a yield-bearing token generally is not either - which is where most of the current regulatory arbitrage sits.