Stablecoin market capitalization surpasses $250 billion amid accelerating regulatory momentum

The total stablecoin market capitalization recently surpassed $250 billion for the first time, signifying their burgeoning trust and adoption.

"Crossing $250 billion marks a turning point," said Hank Huang, CEO at Kronos Research. "Stablecoins are no longer experimental, they're essential."

According to CoinGecko data , the figure currently stands at $250.3 billion, where $245.5 billion is owned by U.S. dollar-backed stablecoins. Among stablecoins, Tether's USDT dominated with a market capitalization exceeding $153 billion, ahead of runner-up Circle USDC's $60.9 billion.

Key drivers of the stablecoin market cap are regulatory clarity and DeFi adoption, LVRG Research Director Nick Ruck told The Block. 

Endorsed by President Donald Trump, the U.S. Senate recently advanced the Guiding and Establishing National Innovation for U.S. Stablecoins Act (GENIUS Act), a critical piece of legislation aiming to establish legal frameworks for dollar-pegged cryptocurrencies. 

This bill mandates that stablecoins be fully backed by U.S. dollars or highly liquid assets, requires annual audits for issuers with over $50 billion in market capitalization, and includes provisions for foreign issuers.

Following developments in the U.S., Hong Kong passed its stablecoin bill on May 21, placing a licensing regime on issuers of fiat stablecoins that want to operate in the region.

Such efforts for regulatory clarity has allowed major TradFi players to dabble in their own stablecoin ventures, where companies co-owned by JPMorgan, Bank of America, CitiGroup, Wells Fargo and other major commercial banks are reportedly in talks to launch a joint stablecoin project.

Meanwhile, the decentralized finance sector has experienced prominent growth since 2024, as decentralized exchanges (DEXs), cross-chain trading, staking, and other applications gain increasing appeal among crypto users. According to DefiLlama data , DeFi currently has over $113.17 billion in total value locked.

Last month, the total trading volume on DEXs hit a record 25% share of global spot trade volume compared to centralized exchanges. Crypto venture capital Hashed CEO Simon Kim said this shows a "clear paradigm shift from centralized to decentralized."

"The stablecoin sector is primed for rapid expansion, with the market potentially reaching double by 2026," said Kronos Research CEO Huang. 

Looking forward, Huang said that the stablecoin issuer landscape may rapidly evolve beyond the dominance of USDT and USDC, with emerging players like the Trump-aligned USD1 and even bank-issued tokens.