Stablecoin Market Reaches $235 Billion Supply Amid Regulatory Clarity and Intensified Competition

The stablecoin market has experienced significant growth and regulatory evolution, with its average supply of USD-backed stablecoins reaching $235 billion in July 2025. This expansion, coupled with new regulatory frameworks, has ignited discussions about the future competitive landscape, prompting one social media user, "alex 🏴‍☠️🇺🇸🇺🇦," to tweet, "> mebbe stablecoins will suffer from perfect competition."

This surge in activity follows the passage of the GENIUS (Guiding and Establishing National Innovation for U.S. Stablecoins) Act in the U.S., which established the first federal regulatory system for stablecoins. The act mandates 1:1 backing with high-quality liquid assets and monthly reserve disclosures, aiming to instill greater confidence and drive mass adoption. Former Acting Comptroller of the Currency Brian Brooks believes this regulatory clarity will unleash a "stablecoin gold rush."

The market is witnessing a proliferation of players, with traditional banks, fintechs, and major payment companies like Mastercard, Visa, and Stripe actively entering the space. While Tether and Circle continue to dominate, holding $155 billion and $60 billion respectively, the increased participation signals a rapidly maturing and competitive environment. Funding to stablecoin companies is projected to reach $12.3 billion in 2025, reflecting growing institutional interest.

However, not all experts view this proliferation without concern. Professor Barry Eichengreen of UC Berkeley has voiced apprehension, suggesting that a rapid increase in stablecoins could undermine the "singleness of money" and lead to "economic chaos." He draws parallels to the problematic Free Banking Era, where private banknotes traded at different values, causing instability. These concerns align with the idea that intense competition, or "perfect competition," could challenge the stability and profitability of individual stablecoin offerings.

Despite potential challenges, stablecoins are driving innovation in several key areas, including B2B cross-border transactions, C2C remittances, and asset tokenization. These applications leverage stablecoins' speed and lower fees to enhance global payments. As the market continues to evolve under new regulatory oversight, the balance between innovation, competition, and financial stability remains a critical focus for stakeholders.