The total market capitalization for stablecoins reached over $230 billion for the first time on Thursday amid U.S. regulatory efforts to boost their adoption.
According to DefiLlama data, the total market cap currently stands at $230.45 billion, adding $2.3 billion in the past seven days. Compared to the same day last year, stablecoin market capitalization has grown by 56%.
Out of the entire market cap, Tether's USDT stablecoin dominates 62.6% with nearly $144 billion, followed by Circle USDC with $59 billion in market cap.
The stablecoin market had grown to reach nearly $190 billion around April 2022 but took a significant dip later that year as the Terra-Luna stablecoin ecosystem collapsed followed by crisis at major crypto firms including FTX, Celsius, BlockFi and others. It declined steadily until mid-2023, when it started its rebound.
The latest expansion of stablecoins is attributable to increased institutional participation in crypto, LVRG Research Director Nick Ruck told The Block.
"Over the past year, the U.S. and Hong Kong have cut legal barriers and streamlined the process for TradFi companies, including banks, to get more involved with crypto," Ruck said.
The crypto analyst pointed out that major institutions, such as PayPal, have created their own stablecoins for cross-border transactions and on-chain deals.
"The increase in stablecoins could also be a sign that institutions and investors are preparing for better trading conditions and a continuation of a bullish trend for the market," Ruck added.
Regulatory boost
During his latest Thursday crypto conference speech, U.S. President Donald Trump reiterated his ambitions to push dollar-pegged stablecoins to boost the dollar's global dominance. Since Trump started his term on Jan. 20, the total stablecoins market cap grew by around $20 billion, DefiLlama data shows.
"[I've] called on Congress to pass landmark legislation creating simple, common-sense rules for stablecoins and market structure," said Trump. "With the right legal framework, institutions, large and small, will be liberated to invest, innovate and take part in one of the most exciting technological revolutions in modern history."
Bo Hines, the executive director of the President’s Council of Advisers on Digital Assets, said earlier this week at the same conference that stablecoin legislation could be finalized in the coming months.
On March 13, the Senate Banking Committee voted to advance the "GENIUS Act" proposal. This proposal aims to build a regulatory framework for stablecoins, including enforcement of 1:1 backings and anti-money laundering protection measures.
"Following the repeal of SAB 121, the current administration expects Congress to pass legislation supporting the adoption of stablecoins," said Paul Howard, senior director at crypto trading firm Wincent.
"Those in the crypto community and, more broadly, the financial markets can expect to see a proliferation of stablecoins as a mechanism of intra-company and cross-border payments," Howard said. "It's a long overdue step for utilizing technology."
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