Stablecoins just had their biggest year on record.
The total stablecoin market capitalization has grown by 49% in 2025, going from $205 billion in January to $306 billion at the end of November, according to data on crypto analytics platform DeFi Llama.
The ballooning of the stablecoin category has been driven by very strong catalysts. In the past 12 months, stablecoin issuers have gained a U.S. regulatory framework, further clarity and rollout of MiCA in the European market, and the embrace of them by institutions.
Stablecoins are digital tokens designed to hold a 1:1 peg to fiat currency, like the U.S. Dollar or the euro. Issuers hold fiat money in reserve with the promise that tokens can be redeemed for the underlying cash at any time. Two of the oldest and most widely used stablecoins, Tether’s USDT and Circle’s USDC, have existed since 2014 and 2018, respectively.
But it wasn’t until July this year that President Donald Trump signed the Guiding and Establishing National Innovation for U.S. Stablecoins Act, or GENIUS Act. It was introduced by Sen. Bill Haggerty (R-TN) in May, cleared the Senate in June, and signed into law a month later.
“The passage of the GENIUS Act was quite important. That created a federal regulatory framework for stablecoins that we haven’t had. So I think it provides clarity to the market. Hopefully it will address at least some of the risks of stablecoins. So I think it’s a very important step forward,” Timothy Massad, former Commodities and Futures Trading Commission chairman, told Decrypt.
Even before the GENIUS Act was signed, the institutionalization of stablecoins was well underway. Payments processor Stripe unveiled plans to support stablecoin rails in May, saying they would be supported in more than 100 countries. PayPal expanded support for PYUSD onto Tron and Avalanche networks in September just as its stablecoin topped $1 billion in circulation.
And Circle, which previously attempted to go public by way of a SPAC in 2022, finally made its debut with an IPO. When CRCL began trading on the New York Stock Exchange on June 30, it was so popular that the exchange halted trading three times within the first hour, with the price of the token more than tripling in that short span.
But it’s not been smooth sailing for all stablecoin issuers. In November, S&P Global Ratings downgraded Tether’s USDT stability to “weak,” arguing that the inclusion of Bitcoin in its reserves makes it susceptible to higher risks if the price of BTC crashes.
Tether has dealt with concerns about the composition of the reserves backing its stablecoin before, in 2021, when critics sounded the alarm about its commercial paper holdings. Commercial paper is a form of short-term, unsecured corporate debt. By late 2022, the issuer claimed it had completely eliminated commercial paper from its reserves.
At the same time, several the largest stablecoin issuers just got provisional approval for national banking charters been applying to get banking charters from the Office of the Comptroller of the Currency.
Circle, Ripple, Paxos, BitGo and Fidelity—which is not a stablecoin issuer, although it did test one out earlier this year—have all been provisionally approved for banking charters by the OCC.
“New entrants into the federal banking sector are good for consumers, the banking industry and the economy,” Jonathan V. Gould, Comptroller of the Currency, said in a press release. “They provide access to new products, services and sources of credit to consumers, and ensure a dynamic, competitive and diverse banking system.”
And there are more rules coming to accommodate stablecoin issuers. In December, FDIC Acting Chairman Travis Hill told lawmakers the agency “has begun work to promulgate rules to implement the GENIUS Act,” and expects to propose an application framework “later this month” and prudential standards “early next year.”
