Stablecoin Market Shrinks by $10 Billion Amid Regulatory Shifts

The stablecoin market has experienced its largest monthly decline since the Terra crash in May 2022, shedding $10 billion from its May peak to reach a total of $310 billion.

This drop is partly due to changing regulatory conditions and capital rotation into alternative yield-bearing instruments. The adjusted transaction volume hit a record $1.79 trillion in June, up 63% month-over-month, but the gap between falling market cap and rising volume is a sign that investors are seeking returns elsewhere.

The GENIUS Act, passed in July 2025, banned stablecoin issuers from paying interest on payment tokens, leading to a shift towards tokenized Treasury funds. These funds have grown from $11 billion to $16 billion in five months, with Circle's USYC fund overtaking BlackRock's BUIDL fund.