The stablecoin market has set a new record. In August, stablecoin transaction volume soared by 92%, reaching an unprecedented $3 trillion, according to data from DefiLlama. The growth highlights the increasing role of stablecoins in the global financial ecosystem. 

This is more remarkable considering the volatility in broader crypto markets during the period. Bitcoin, for instance, shed 6.49% of its value. Yet, the stablecoin economy thrived, growing by over $17 billion in market capitalisation. 

According to the DefiLlama report, the total stablecoin market cap reached $284.558 billion by September 2, 2025. This growth underscores the resilience of stablecoins, which are pegged to fiat currencies like the U.S. dollar, offering stability in a volatile market. It also solidifies their position as a key driver of decentralised finance (DeFi) and digital payments.

The $3 trillion transaction volume marks a significant leap from previous months. It reflects growing adoption in DeFi, cross-border payments, and institutional use cases. 

Stablecoins like Tether (USDT) and USD Coin (USDC) led the charge, with USDT maintaining its dominance at a $143 billion market cap and USDC following at $58 billion.

Why Stablecoins are booming

Several factors fuelled this surge; Stablecoins provide a reliable bridge between traditional finance and crypto. Their fixed value makes them ideal for transactions, remittances, and trading. In 2024 alone, stablecoin transfer volumes reached $27.6 trillion, surpassing the combined transaction volumes of Visa and Mastercard. This trend continued into 2025, with August’s $3 trillion figure setting a new benchmark.

The GENIUS Act, signed into law in July 2025, played a pivotal role. The U.S. legislation established a federal framework for dollar-pegged stablecoins, mandating 1:1 reserves and strict compliance. 

This clarity has attracted banks, fintechs, and retailers like JPMorgan and Walmart to explore stablecoin models. Analysts predict the stablecoin market could hit $2 trillion by 2028, driven by this regulatory support.

Yield-bearing stablecoins also contributed to the boom. Protocols like Ethena’s USDe, which grew to a $5.46 billion market cap by June 2025, have gained traction. 

These assets offer returns through tokenised treasuries, appealing to investors seeking passive income. By May 2025, yield-bearing stablecoins accounted for 4.5% of the total stablecoin market, a sharp rise from 1% in early 2024.

Network dynamics

Ethereum and Tron remain dominant platforms for stablecoin transactions, hosting 83% of the market. However, newer networks like Solana, Base, and Arbitrum are gaining ground. 

Solana and Base saw 98% of their stablecoin volume driven by bots in 2024, highlighting automated trading’s role. Despite this, organic activity is growing, with USDC accounting for 70% of on-chain transfer volume.

Furthermore, the global regulatory landscape is evolving. The EU’s MiCA framework and the U.S. GENIUS Act are paving the way for mainstream adoption. 

Central banks are exploring stablecoin integration, with over 25,000 merchants worldwide now accepting them for online transactions. Corporate use for cross-border payments and supply-chain settlements grew by 25% in 2025, driven by low fees and instant settlement.

Fintech giants like Stripe, PayPal, and Visa are also embracing stablecoins. Stripe reintroduced USDC payments in 2024, enabling merchants in 70 countries to settle in USD. PayPal’s PYUSD and Visa’s tokenised asset platform further signal stablecoins’ integration into traditional finance.

The August surge is a sign of things to come. Analysts at Bitwise and Bloomberg forecast the stablecoin market could reach $400 billion by the end of 2025. 

Treasury Secretary Scott Bessent has predicted a $2 trillion market in the coming years. As stablecoins evolve from trading tools to engines of market liquidity, their role in powering Bitcoin and Ethereum rallies is under scrutiny.

However, challenges remain. Concerns about Tether’s reserve transparency persist, and bot-driven volume raises questions about organic growth. 

Still, the data is clear: stablecoins are reshaping finance. With $3 trillion in August transactions and growing institutional interest, they’re not just another asset class but a powerful tool revolutionising global payments.