CryptoSlate
Stablecoins just printed a fresh record: total circulating supply has crossed $322 billion, with Tether's USDT and Circle's USDC still controlling more than 80% of the market and USDT alone near 59%. Ethereum and Tron continue to carry the bulk of those balances, even as issuers like Western Union — which launched USDPT on Solana via Anchorage Digital Bank — push settlement onto higher-throughput rails.
The milestone lands inside a fast-tightening regulatory perimeter. Under the federal GENIUS Act framework, payment stablecoin issuers are now required to back tokens 1:1 with cash, short-dated Treasuries and Federal Reserve-eligible repo, segregate reserves, publish monthly attestations, and sit under direct federal oversight. That structurally bars them from the maturity transformation and fractional-reserve lending that commercial banks rely on — which is precisely why the banking lobby treats stablecoin growth as an existential deposit threat, not a marginal product line.
Why it matters
Every fiat-to-stablecoin conversion is, from a commercial bank's perspective, a withdrawal: low-cost funding, payment-fee revenue and transaction data all leave the regulated perimeter and move to a non-bank issuer. Coinbase's Chief Policy Officer Faryar Shirzad has pushed back on the alarm, noting that private money — commercial bank deposits and money-market fund shares — already makes up roughly 90% of M2, so the operative question is reserve and disclosure architecture, not issuer type. The GENIUS Act is the legislative answer to that framing; the bank-vs-stablecoin framing is the strategic one.
Market impact
Banks aren't waiting for the policy fight to resolve. Tokenized-deposit networks — JPMorgan's Kinexys alone is estimated to clear more than $1 trillion a year in intercompany and wholesale flows — are on track to route over $4 trillion annually, versus roughly $400 billion in projected 2025 stablecoin payment volume. The structural advantage for banks is yield: licensed stablecoin issuers are largely barred from paying interest on tokens, while tokenized deposits sit inside fractional-reserve banks that can. The structural disadvantage is fragmentation — single-bank permissioned ledgers don't natively interoperate, which is why the BIS's Project Agorá, Swift's orchestration layer, Partior and Chainlink's CCIP are all being stress-tested as shared coordination rails.
Frequently asked questions
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How big is the stablecoin market right now?
Total circulating stablecoin supply crossed a record $322 billion. Tether's USDT and Circle's USDC together control more than 80% of that market, with USDT alone at roughly 59%, and most balances still settle on Ethereum and Tron.
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What does the GENIUS Act require of stablecoin issuers?
Under the federal GENIUS Act framework, payment stablecoin issuers must back circulating tokens 1:1 with cash, short-dated US Treasuries and Federal Reserve-eligible repo, segregate reserves, publish monthly independent attestations, and operate under direct federal oversight. Issuers are barred from lending or…
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Why do banks see stablecoins as a threat?
Every fiat-to-stablecoin conversion removes low-cost deposits, payment-fee revenue and transaction data from the regulated bank balance sheet and shifts them to a non-bank digital issuer. That is why the traditional banking sector treats stablecoin growth as a structural deposit threat rather than a marginal product…
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What are tokenized deposits and how big is that market?
Tokenized deposits are traditional bank deposit liabilities represented on a blockchain ledger, keeping the customer inside the regulated bank perimeter while gaining smart-contract programmability and faster settlement. McKinsey estimates institutional tokenized-deposit networks are on track to facilitate more than…
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Will stablecoins or tokenized deposits win the digital-dollar race?
The consensus framing is layered rather than winner-take-all: public stablecoins like USDT and USDC dominate retail, DeFi and cross-border remittance flows as money in motion; bank-led tokenized deposits anchor institutional corporate treasury and wholesale settlement as money at rest; wholesale CBDCs sit underneath…
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