The total market value of the largest five stablecoins exceeded $200 billion for the first time, after Treasury Secretary Scott Bessent pledged on Friday to employ digital assets to sustain the U.S. dollar as the global reserve currency.
The valuation of these coins, which are tied to real-world currencies like the U.S. dollar, reached as much as $205 billion, according to Glassnode data. Demand increased as investors sought safety from declining cryptocurrencies like Bitcoin and Ethereum.
Key points:
- The overall supply of stablecoins has exceeded $200 billion.
- USDC is nearing a market cap of $60 billion, gaining $25 billion since the U.S. election.
- Tether continues to hold a significant amount of three-month U.S. Treasuries as China and Japan reduce their U.S. holdings.
Since the election of President Donald Trump, the stablecoin market cap has increased by $40 billion. With cryptocurrencies and U.S. stocks facing challenges recently, stablecoins have emerged as clear winners.
Tether’s USDT has kept a market cap near $140 billion since December, while Circle’s USDC is approaching $60 billion, marking a $25 billion rise since the election.
At the Digital Asset Summit on Friday, Bessent stated, “We are going to keep the U.S. the dominant reserve currency, and we will use stablecoins to do it.”
Bessent’s comments reflect concerns about macroeconomic and geopolitical instability, which may cause a decline in foreign interest in U.S. debt, leading to a rise in treasury yields. Over the past year, Japan and China, the largest holders of U.S. Treasuries, have decreased their assets.
For the dollar to retain its status as a global reserve currency, it requires consistent demand for U.S. debt. Stablecoins have been identified as ideal partners in this strategy, capable of helping to lower Treasury yields and expand the dominance of the dollar globally.
