Stablecoins Hit Record Market Cap as Industry Sector Expands

The stablecoins market reached an unprecedented milestone in May 2025, with total market capitalization climbing to $246 billion—marking the twentieth consecutive month of growth.

This surge demonstrates the continued demand for digital currencies pegged to traditional assets, even as broader crypto markets experience significant volatility.

USDT (Tether) led this expansion, becoming the first stablecoin to surpass $150 billion in market value. The token’s market cap increased 3.12% to $153 billion, while its trading dominance strengthened to 79% of all stablecoin volume on centralized exchanges.

This represents the highest trading share since February, indicating renewed institutional confidence in the world’s largest stablecoin.

Despite overall market growth, stablecoin dominance within the broader crypto ecosystem actually declined from 8.09% to 7.12%. This apparent contradiction reflects Bitcoin’s surge to a new all-time high of $111,960, which drove significant capital into alternative digital assets.

New Stablecoins Reshape Market Competition

World Liberty Financial’s USD1 emerged as a notable disruptor, reaching $2.15 billion in market cap just one month after launch. The Trump family-backed stablecoin achieved a $1 billion valuation in three days, making it the second-fastest stablecoin to reach this benchmark.

USD1 now ranks as the seventh-largest stablecoin and has secured listings on major exchanges, including Binance, HTX, and MEXC.

Meanwhile, established players faced mixed fortunes. USD Coin (USDC) experienced its first decline in seven months, dropping 1.82% to $60.9 billion. Conversely, BlackRock’s BUIDL token surged 14.6% to $2.90 billion, while Ethena’s USDe gained 11.7% to reach $5.22 billion.

Central Bank Digital Currencies Gain Global Momentum

CBDC development accelerated across multiple jurisdictions in May. India’s digital rupee circulation exploded 334% year-over-year, rising from $28 million to $122 million. This growth highlights the practical adoption of government-issued digital currencies beyond pilot programs.

Colombia launched its first CBDC initiative using blockchain technology on the Cosmos network, focusing on programmable money settlements. The European Central Bank simultaneously partnered with 70 private organizations through an innovation platform to explore digital euro implementation.

Tether’s reserves report revealed approximately $115 billion in U.S. Treasury exposure, positioning the company ahead of sovereign nations like Germany and the UAE in Treasury holdings.

Most of these investments are concentrated in Treasury bills with maturities under 90 days, providing stability while generating substantial returns.