Stablecoin Market Loses $15 Billion Amid New Federal Rules

The stablecoin market has experienced its largest drop since Terra's collapse in 2022, shedding over $15 billion in value. This decline is attributed to new federal rules that eliminated interest payments on digital dollars, effectively wiping out yield-driven capital from the market.

Tether's USDT and Circle's USDC accounted for most of the $15 billion decline, with their supply falling by approximately $6 billion each since mid-May 2026. The GENIUS Act, signed into law in July 2025, prohibited licensed issuers from paying interest or yield tied to holding or using their tokens, leading many investors to seek alternative investments.

Tokenized Treasuries have seen significant growth, with holdings reaching nearly $17 billion by late July. This shift towards tokenized cash products and Treasury securities has been driven by the loss of interest income for stablecoin holders.