Ranking third in stablecoin supply is Solana, which has quickly emerged as a key contender alongside Ethereum and Tron. Its growth trajectory accelerated sharply in 2025, with supply expanding fivefold from $2.2 billion in January 2024 to $11.4 billion by January 2025. Remarkably, $6.1 billion was added in just one month between December 2024 and January 2025, fueled by the minting of around $5.3 billion in USDC amid retail frenzy around the TRUMP memecoin.

When comparing supply changes across major chains, Solana consistently ranks in third place. In 2024, Solana’s stablecoin supply increased by $9.24 billion, nearly matching Tron’s $9.63 billion. In Q3 2025, it once again held third place, adding $2.11 billion, almost on par with Arbitrum’s $2.15 billion. These figures highlight Solana’s strengthening position as the third pillar of the stablecoin ecosystem.

Stablecoins have traditionally been classified based on the nature of their collateral and stabilization mechanisms. Common categories include fiat-backed, crypto-backed, commodity-backed, synthetic dollar and algorithmic stablecoins. However, as the sector matures and innovation accelerates, these boundaries are increasingly blurred. Today, it is not uncommon for a single stablecoin to straddle multiple classifications, such as a hybrid model that is both crypto-backed and algorithmic, or even one that combines fiat and crypto collateral.

In this report, we present a taxonomy derived from an exclusive dataset of over 200 active stablecoins tracked by Birdeye. For consistency and clarity, we adopt the classic categorical framework while allowing each stablecoin to appear in multiple categories if it exhibits overlapping features.

Our findings reveal that crypto-backed stablecoins constitute the majority share by count at 58.7%, nearly double the number of fiat-backed stablecoins. Despite their numerical dominance, the combined market capitalization of crypto-backed stablecoins remains only a fraction of that of fiat-backed ones. This disparity is largely due to the structural differences between issuers: smaller, agile development teams with limited capital typically issue crypto-backed stablecoins, while fiat-backed issuance is concentrated among institutions with access to large banking and treasury reserves.

Algorithmic stablecoins remain limited in both quantity and market share. Following the collapse of Terra UST in 2022, confidence in fully algorithmic stablecoins eroded dramatically. As a result, most teams now opt for hybrid designs that combine both crypto collateralization and algorithmic rebalancing.

Another useful lens for classification is the peg currency. Unsurprisingly, USD-pegged stablecoins dominate the landscape, comprising 77.4% by count and approximately 99.79% by market capitalization. The euro (EUR) is a distant second, accounting for 7.8% of stablecoins by number and a mere 0.19% of total value. This heavy concentration in USD exposure underscores the global demand for dollar-denominated digital assets and reflects the dollar's continued role as the world's reserve currency.

Stablecoin issuers generate revenue through a variety of mechanisms, depending on their design architecture. Fiat-backed issuers like Tether (USDT) and Circle (USDC) primarily earn interest on reserves held in traditional financial institutions. These reserves, often consisting of U.S. dollars or equivalent short-duration assets like Treasury bills, yield substantial income. By June 2025, Tether managed $127.1 billion and Circle $54.1 billion in direct and indirect U.S. Treasury holdings, together exceeding Saudi Arabia’s holdings and ranking as the world’s 17th-largest investor.

Financial performance, however, shows a stark contrast. At the close of 2024, Tether posted $13 billion in profit, cementing its position as the most profitable stablecoin issuer. By comparison, Circle reported only $156 million in profit on $1.68 billion in revenue, constrained by over $1 billion in distribution and partner fees.

While they also earn revenue from reserve interest, Agora and M0 take a very different path than Tether and Circle. Agora offers a white-label platform that lets businesses issue their own branded stablecoins, sharing reserve yields with issuers, partners, and liquidity providers to encourage ecosystem growth. M0, on the other hand, runs a federated model in which permissioned Minters create tokens backed by compliant reserves while Validators enforce governance, distributing yield and fees across all participants. Together, these models mark a shift away from issuer-dominated approaches like USDT and USDC, toward open platforms that decentralize both participation and the economics of stablecoin issuance.

In contrast, crypto-backed stablecoins exhibit greater diversity in business models and monetization strategies. These issuers tend to innovate at the protocol level, integrating yield mechanics, incentive structures, and collateral management systems that differ significantly from their fiat-backed counterparts.

Below is a comparative overview of three prominent crypto-backed stablecoin issuers—two of which, Sky Money (USDS) and Ethena (USDe), currently rank third and fourth in annual revenue, respectively. The third entry, Perena (USD*), offers a novel hybrid model integrating yield-bearing liquidity architecture within its stablecoin design.

On BNB Chain, stablecoins play a far more prominent role, representing 14.2% of total chain liquidity compared to Ethereum’s 2.2%. Within this ecosystem, USDT consistently outweighed USDC by a factor of six. Meanwhile, the newly launched USD1 has experienced explosive growth in 2025. Its market count began accelerating in May and surged 30-fold from 500 to 15,000 by August, driven largely by meme trading activity on four.meme. Trading volumes peaked on June 30, when the TAG–USD1 pair saw wallet 0xb1aEc wash-trade roughly $2 billion in TAG at ~$100K per ticket, though the motivation behind the activity remains unclear.

Cross-chain analysis of USDC and USDT liquidity across six major networks reveals that while the two tokens maintained similar levels in 2024, a surge in USDC activity on Base in early 2025 pushed its total liquidity roughly 20% higher than USDT’s. Both remain most concentrated on Ethereum, but distribution diverges by chain: USDT dominates on BNB, while USDC leads on Base and Sui.

With such deep liquidity, it comes as no surprise that stablecoin on-chain trading volume is consistently topping the charts with billions of dollars traded every day. At peak, total volume of USDT and USDC on Solana, Ethereum, BNB Chain, Arbitrum, Base, Sui, and Optimism reached $34.7 billion on January 20, driven largely by USDT-WBNB, USDT-TRUMP and USDT-USDC pairs on BNB Chain. The meme wave on BNB Chain also contributed significantly to the volume of USDT from mid-May to August 2025, leading to an average daily volume of $7.42 billion.

Beyond their role in decentralized exchanges, stablecoins also serve as core collateral in lending markets. On August 19, 2025, Aave announced that USDC deposits surpassed $6 billion on its platform. Just a few days later, on August 24, total stablecoin deposits across Ethereum, Arbitrum, and Base hit an all-time high of $17.16 billion—second only to ETH tokens and accounting for 26% of Aave’s total deposits.

On Morpho, the second-largest lending protocol by TVL according to DefiLlama, stablecoins play an equally dominant role. On August 25, USDC represented 52.7% of total supply across loan assets and made up 58% of total borrow demand, highlighting its centrality in credit markets. By anchoring supply and borrow activity, stablecoins enable a wide range of credit strategies: borrowers can unlock liquidity without liquidating volatile holdings, while lenders earn predictable returns, often enhanced by governance token incentives.

DAOs are increasingly moving beyond the era of holding only their native governance tokens. Today, they actively diversify their treasuries by converting portions into stablecoins, which are valued for their volatility resistance, cross-chain liquidity, and operational versatility. Stablecoins serve as the preferred medium for managing DAO expenses, facilitating grant distributions, compensating contributors, and enabling partnerships across protocols.

According to DeepDAO, USDC ranks as the second most widely held token by number of DAOs. As of August 4, 272 DAOs held a collective total of $208.3 million in USDC, highlighting its widespread adoption as a trusted reserve asset.

Beyond simply holding stablecoins, DAOs are becoming more sophisticated in how they deploy idle capital. Many treasuries are now allocating stablecoins into yield-generating strategies or pairing them with their native tokens on DEXs to bootstrap liquidity.

A prominent example is Arbitrum’s partnership with Steakhouse Financial through the Stable Treasury Endowment Program (STEP 2.0), launched in 2025. The initiative converts a portion of Arbitrum’s treasury into yield-bearing stablecoins, allocating them across lending protocols and real-world asset (RWA) vaults. As of August 7, STEP had surpassed $1 million in accrued interest, primarily sourced from BlackRock’s BUIDL, Superstate’s USTB, and Ondo’s USDY.

Yield-bearing stablecoins represent a fast-growing subset of the market that directly ties stablecoin usage to passive income. These tokens typically represent derivative assets minted from staking protocols, real-world asset vaults, or lending strategies, and they automatically accrue yield for users over time, making them ideal in an environment where capital efficiency is paramount.

According to StableWatch, the supply of yield-bearing stablecoins has expanded dramatically, growing 14-fold in under two years from under $1.5 billion in January 2024 to a peak of $15 billion in early September 2025. Cumulatively, yield-bearing stablecoins have distributed more than $900 million in yield, with average daily payouts reaching $1.5 million.

The market is currently led by sUSDe (Ethena), a reward-bearing version of USDe with a supply of $5.77 billion and ~9.11% APY, and sUSDS (Sky Money), a staked version of USDS backed by overcollateralized assets with a supply of $2.06 billion and ~4.50% APY. Together, they account for 52% of the total yield-bearing stablecoin market cap and 50.97% of total yield paid out.

While stablecoins have already revolutionized on-chain finance, their traction in real-world payments is no longer nascent. In fact, stablecoins are actively reshaping how value moves across borders, platforms, and institutions. By combining the programmability of crypto with the stability of fiat currencies, stablecoins offer faster, cheaper, and more accessible alternatives to traditional payment rails. This is especially relevant in a world increasingly demanding 24/7, cross-border, and low-cost financial infrastructure.

Stablecoins address the structural inefficiencies of legacy payments, such as slow settlement cycles, high fees, fragmented infrastructure, and restricted accessibility. Traditional systems like SWIFT or card networks often involve multiple intermediaries, introduce FX slippage, and are constrained by banking hours or jurisdictional boundaries. In contrast, stablecoins operate on open, permissionless networks that allow for 24/7 finality, programmable logic, and near-zero fees. Below is a detailed comparison by McKinsey:

One of the most striking indicators of stablecoins’ disruptive momentum is their growing transaction volume relative to traditional payment networks. From 2020, stablecoin volume has consistently outpaced PayPal and remittance, and officially surpassed Visa at the end of 2024. By July 2025, $2.3 trillion in stablecoin volume had been processed, almost doubling Visa’s volume ($1.3 trillion).

Stablecoin payment adoption is accelerating across both institutional and retail channels, with transaction data pointing to a clear shift from speculative on-chain activity toward real-world settlement. Artemis reports that between January 2023 and February 2025, stablecoin payments totaled $94.2 billion, with business-to-business transactions leading the flows, followed by peer-to-peer transfers, card-linked payments (typically debit or prepaid cards connected to stablecoin wallets), and business-to-customer payouts. Findings from Fireblocks underscore this momentum: although stablecoin payments currently account for only about 10% of its total transaction volume, growth has been dramatic—from $87 million in early 2021 to $21 billion by mid-2025, representing nearly a threefold increase over four years.

This rising adoption trend is also reflected in institutional sentiment and high-profile corporate moves. A Fireblocks survey of 295 decision-makers in traditional finance and crypto services found that 90% are already taking action on stablecoins: 49% are using them for payments, 23% are in pilot testing, and 18% are in the planning stage. Big Tech companies such as Uber, Meta, Apple, X, Airbnb, and Google are reportedly exploring stablecoin integration.

In February 2025, Stripe completed its largest acquisition to date: purchasing stablecoin platform Bridge for $1.1 billion. Three months later, Stripe launched Stablecoin Financial Accounts, allowing businesses in 101 countries to maintain USD-pegged stablecoin balances and send or receive them worldwide across eight blockchain networks. Most recently on September 4, together with Paradigm, Stripe announced Tempo, a payment-first blockchain designed to handle more than 100K TPS with sub-second finality. Tempo became the fourth payment-focused L1 blockchain for stablecoins announced this year, following Plasma, Stable, and Circle’s Arc.

Meanwhile, in May 2025, MoonPay unveiled its partnership with Mastercard, introducing Mastercard-branded cards linked directly to stablecoin balances. This integration allows stablecoins to be spent at over 150 million merchant locations worldwide, with instant conversion to fiat at the point of sale. Powered by Iron and Helio’s API infrastructure (acquired by MoonPay earlier in 2025), the initiative also supports cross-border payouts and disbursements, spanning gig worker compensation, merchant settlements, and everyday global commerce. Among spendable stablecoins are USDG, PYUSD, USDC, with two more scheduled to launch by year-end: FIUSD, issued by Fiserv on Solana using Paxos and Circle infrastructure, and mUSD, developed by MetaMask with Bridge and M0 on Ethereum and Linea.

On the retail side, innovations are flourishing across the payment stack, with Solana emerging as the preferred destination thanks to its near-zero fees, high throughput, and substantial stablecoin transaction volume. These advantages enable a Web2-like, seamless UX that minimizes friction for payments. As of August 2025, there were 26 applications and 14 infrastructure projects on Solana focused on payments, with 40% operating exclusively on the chain.

The stablecoin ecosystem is witnessing record-breaking capital inflows, driven by growing institutional validation and broader adoption of payment-focused infrastructure. The table below summarizes the most significant investments exceeding $100 million this year in chronological order.

These investments signal a turning point for stablecoins: transforming from speculative trading assets into the backbone of regulated, scalable global payment and settlement systems.

Regulatory clarity plays a pivotal role in enabling stablecoin payment adoption at scale. In contrast to the ambiguous treatment of tokens in many jurisdictions, stablecoins are now receiving dedicated regulatory frameworks:

• Europe’s MiCA (Markets in Crypto Assets) regulation introduces clear licensing requirements for stablecoin issuers, making the EU the most stablecoin-friendly major jurisdiction.
• In July 2025, the U.S. passed the GENIUS Act ("Guiding and Establishing National Innovation for U.S. Stablecoins"), the first comprehensive federal regulatory framework dedicated to payment stablecoins. It passed both chambers with bipartisan support and was signed into law by the President.
• Hong Kong’s Stablecoins Ordinance, effective August 1, 2025, establishes a licensing regime for fiat-referenced issuers, mandating full reserve backing, strict risk controls, and redemption rights. Initial licenses are expected to be issued in early 2026, with only “a handful” approved initially.

The GENIUS Act explicitly prohibits the issuance of yield-bearing stablecoins, reinforcing their role as payment-focused instruments rather than investment vehicles. Deloitte notes that the framework introduces multiple licensing pathways, enabling a broader spectrum of entities—including non-bank institutions—to become issuers. This regulatory clarity is expected to spark a wave of new market entrants, fostering a more diverse and competitive U.S. stablecoin ecosystem.