Stablecoins See Fourfold Growth in Transaction Volume, Outpacing Supply

The stablecoin market has seen significant growth in recent months, with transaction volume increasing four to five times since January 2024. According to Coinbase Institutional, the supply of stablecoins has roughly doubled during this period, while entity-adjusted transaction volume has grown at an even faster rate.

This shift is a departure from the earlier model, where additional supply represented additional demand. With stablecoins now being used in institutional treasury accounts, cross-border transfers, payment applications, and tokenized markets, each unit of supply is circulating more frequently.

The velocity of stablecoins has increased significantly, with Visa's Economic Empowerment Institute calculating a total stablecoin velocity of 13.56 during the fourth quarter of 2025. This means that the average token changed hands more than 13 times during the quarter.

Compared to US M1 velocity, which stood at 1.65 over the same period, the difference is stark. However, it's essential to note that these numbers describe different forms of activity. M1 velocity links cash and checking deposits to spending on goods and services, while total stablecoin velocity includes investment, trading, funding, liquidity management, and settlement.