Tether has shed $5.5 billion in USDT supply since May while stablecoin transaction volume set a record, pulling supply and usage in opposite directions. June brought the largest monthly supply decline since Terra collapsed in 2022. Idle balances are moving into tokenized Treasuries, but the dollars that remain are turning over faster.
Stablecoin supply is shrinking for the first time in years, and the sharpest drop landed in June — a $7.7 billion decline, the largest monthly fall since the collapse of Terra in May 2022. Total market value has fallen about 4.3% from its May peak of $322.41 billion to $308.5 billion.
Transaction volume hits a record $1.83 trillion
Yet the same month set a settlement record. Adjusted stablecoin transaction volume reached $1.83 trillion in June, 60% higher than in May and more than double the level recorded a year earlier. The divergence points to a shift in how stablecoins are used: fewer dollars sit idle, while the remaining supply moves faster through payments, trading and settlement systems.
Idle balances move into tokenized Treasuries
Tether's USDT supply declined from $189.54 billion as at May 1 to roughly $184 billion as at July 29. Circle's USDC fell from $77.27 billion to $72.41 billion within the same period. The contraction remains modest compared with the 26% market collapse of 2022.
Some capital appears to have moved into tokenized Treasury products, which offer returns unavailable on payment stablecoins. That sector has expanded to over $16 billion, up from about $11 billion in March, according to data from rwa.xyz. The GENIUS Act, signed in July 2025, prevents issuers from paying interest directly on payment stablecoins, a structure that encourages treasurers to keep savings in tokenized funds while holding stablecoins only when they need to make payments.
Turnover replaces market cap as the metric
Because of this, velocity is becoming the sharper read on the sector. Stablecoin turnover now runs at about six times per month, according to a March 2026 note by Standard Chartered, roughly twice the rate seen two years ago. USDC has emerged as the leading settlement asset despite a smaller supply than USDT, processing about $1.21 trillion of adjusted volume in June against $576 billion for USDT.
However, not all blockchain transfers represent economic payments, since automated activity, exchange transfers and wash trading can inflate raw figures. McKinsey and Artemis estimated that identifiable real-world payments accounted for about $390 billion in 2025, according to a Forbes report. Business-to-business transactions made up $226 billion of that total. Payroll and remittances contributed roughly $90 billion.
The payments share remains small, but it has expanded sharply over two years. Issuers still earn interest on reserves, so market capitalization still matters — yet for networks, processors and financial platforms, transaction frequency may become the more valuable measure. June's data suggests stablecoins are evolving from parked collateral into active financial infrastructure.
Source: Bitcoin News
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