Stablecoin Market Sheds $10B Amid Regulatory Shifts
The stablecoin market has seen its largest monthly decline since the Terra crash in May 2022, shedding over $10 billion from its peak of $320 billion in May. According to DeFiLlama, this drop is attributed to changing regulatory conditions and capital rotation into alternative yield-bearing instruments.
Despite this decline, adjusted transaction volume hit a record $1.79 trillion in June, up 63% month-over-month. The gap between falling market cap and rising volume can be explained by investors seeking digital dollars with returns close to Treasury bill rates shifting to tokenized Treasury funds.
Circle's USYC fund has grown from $11 billion to $16 billion in five months, overtaking BlackRock's BUIDL fund. This growth has resulted in capital leaving stablecoins and staying in them only for payments, accelerating velocity and lowering total supply.