Stablecoin Supply Sees Sharpest Monthly Drop Since Terra, While Transaction Volume Sets New Record

The stablecoin sector shed $7.7 billion in market capitalization in June, the steepest monthly decline since the TerraLuna collapse in May 2022. Even as supply contracted, adjusted stablecoin transaction volume surged to a record $1.79 trillion, pointing to rising settlement activity. Total stablecoin market cap also eased about $10 billion from its May high to around $300 billion. June's pullback trimmed roughly 3% from the market's May peak, far smaller than the 26% contraction seen during the 2022 Terra unwind. By issuer, Tether's USDT supply fell from about $190 billion in May to roughly $184 billion. USDC also retreated from its March peak near $80 billion to approximately $74 billion. Wincent's Paul Howard described the move as a modest pullback in the context of broader market conditions. Usage, though, accelerated sharply. Adjusted transaction volume jumped 63% from May and 125% year over year to $1.79 trillion. Standard Chartered analyst Geoff Kendrick said stablecoin turnover is now running at about six times per month, nearly double the pace of two years ago. Policy shifts are also reshaping where idle balances sit. Under the GENIUS Act, signed in July 2025, payment stablecoin issuers are barred from offering yield. The Office of the Comptroller of the Currency has proposed extending similar restrictions to affiliated entities. Marquette University's David Krause said investors have been moving idle stablecoins into tokenized Treasury funds that can generate returns. Tokenized Treasury assets have expanded to nearly $16 billion. Circle's USYC surpassed BlackRock's BUIDL, while JPMorgan's tokenized Treasury offering grew 87% in a single month. Network-level metrics also underscore the shift toward faster turnover. Visa pegged stablecoin velocity at 13.56 per quarter, versus 1.65 for the U.S. M1 money supply. Despite its smaller supply base, USDC processed larger settlement volumes than USDT: in the first half of 2026, USDC accounted for about 70% of adjusted transaction volume, while USDT represented roughly 25%. Visa said its stablecoin settlement business has reached a $7 billion annualized run rate across nine blockchains. Mastercard has also broadened support to six stablecoins operating across eight blockchain networks.