According to DeFiLlama, as of July 28, the total market capitalization of stablecoins has dropped by over $10 billion from its peak in May, now standing around $310 billion. This decline marks the largest monthly decrease since the Terra crash in May 2022.

In contrast, the adjusted transaction volume for June 2026 reached a historic high of $1.79 trillion, representing an increase of approximately 63% month-over-month.

Source: DeFiLlama.

Where Are Capital and Yields Going?

A pivotal factor behind the diverging trends of declining market capitalization and rising transaction volumes is the GENIUS Act, enacted in July 2025. This legislation prohibits issuers from offering interest on payment stablecoins.

David Krause, a finance professor at Marquette University, explained the mechanics of this situation:

"The complexity lies in the fact that the prohibition did not eliminate the underlying demand for yield; it merely shifted it. Investors seeking a digital dollar with yields close to U.S. Treasury bill rates have found alternative products that are legally permitted to offer such returns."

He noted that tokenized Treasury bond funds, DeFi lending protocols, and offshore stablecoin issuers are ready to meet this demand. The Treasury allocates surplus dollars to a tokenized fund that pays 4%, holding stablecoins only for the duration necessary to facilitate actual payments. Capital is leaving the asset while working balances remain and circulate faster, which is reflected in the supply decline amid record volumes.

"The rule [GENIUS Act], intended to protect banks and maintain monetary control, has instead pushed capital into instruments that regulators understand less and oversee more loosely."

As a result, large players have shifted their funds into the RWA sector — tokenized U.S. Treasury bond funds, which have grown from $11 billion to $16 billion over five months. According to aggregator RWA.xyz, this shift has changed the leadership in the segment: Circle's USYC fund surpassed BlackRock's BUIDL, while a similar product from JPMorgan grew by 87% in just one month.

Source: RWA.xyz.

USDC Takes Initiative and Industry Business Model Shift

The increase in transaction activity has altered the competitive landscape. According to Visa, the velocity of stablecoins in Q4 2025 reached 13.56, outpacing the dollar aggregate M1 nearly eightfold, which is estimated at 1.65.

In this competitive environment, USDC has emerged as the primary tool for institutional investors. According to the analytical dashboard Visa based on Allium, USDC accounted for about 70% of transactions in the first half of 2026.

By the end of June, the adjusted transfer volume in USDC reached $1.21 trillion (approximately 67.6%), while USDT stood at $576 billion (around 32%). Despite trailing behind, Tether maintains its absolute dominance in capitalization, retaining its role as a "savings account" in developing countries.

Share of transaction volume for various stablecoins. Source: Visa.

The increase in transaction velocity, coupled with stagnant supply, is reshaping the fundamental economics of the cryptocurrency sector:

  • Impact on the old issuer model. Earnings solely from interest on reserves, which formed the basis of the business in 2021, are no longer the primary financial driver;
  • Infrastructure triumphs. The main sources of revenue are shifting towards payment networks, processors, and blockchains that charge transaction fees. Traditional giants like Visa no longer evaluate the market based on asset capitalization, but focus solely on clearing volumes;
  • Corporate sector dominance. According to a joint study by McKinsey and Artemis, only about 1% of the movement in 2025 was attributed to identifiable real payments — approximately $390 billion, of which $226 billion was in the B2B sector. Although small, this share is thirty times larger than two years ago.

It is worth noting that experts explained the prohibition on issuing CBDCs for the Federal Reserve in June.