Stablecoin Velocity Doubles, Challenging Long-Term Supply Forecasts
Standard Chartered's crypto research team has identified a significant shift in the stablecoin market. According to Geoff Kendrick, the bank's head of crypto research, stablecoin velocity has doubled over the past two years. Velocity measures how frequently a stablecoin is used relative to the total amount in circulation.
This increase in velocity means that the same outstanding supply of stablecoins can process a larger volume of transactions. Kendrick notes that this trend marks a departure from earlier assumptions that turnover rates would remain stable as the market expanded.
The surge in velocity has been concentrated in USDC, Circle's dollar-pegged token and the second-largest stablecoin by market capitalization. USDC's turnover rate began rising in mid-2024 across multiple blockchain networks, with the sharpest increases recorded on Solana and Base.
Kendrick linked the trend to growing adoption in traditional finance payment applications and early AI-driven transactions on networks such as Coinbase-backed x402. He noted that Tether's USDT followed a different pattern, with its velocity remaining relatively low across the same period.
The findings suggest that expanding real-world utility is reshaping stablecoin circulation patterns without yet threatening the bank's long-term supply forecast. Despite the shift, Standard Chartered maintains its forecast that the total stablecoin market will reach $2 trillion by the end of 2028.