Stablecoin supply fell $7.7B in June, yet onchain transaction volume hit a record $1.79T. Velocity is up sharply. A portion of capital moved to tokenized Treasuries.
The stablecoin market lost $7.7 billion in June, its biggest monthly contraction since the Terra collapse in 2022. Total market cap settled near $312 billion, a 2.39% decline from May, according to CoinDesk Data.
That number looks like a signal of weakness. Onchain activity told a different story.
Adjusted transaction volume hit $1.79 trillion in June, a 63% jump from May and a 125% increase year-over-year, according to Visa's Allium-powered analytics platform. Circle's USDC processed roughly $1.21 trillion of that. Tether's USDT, which has a much larger circulating supply, handled about $576 billion.
USDT supply fell from about $190 billion in May to roughly $184 billion. USDC dropped from a March high near $80 billion to around $74 billion. Both held their dollar peg through the period.
Standard Chartered's research shows stablecoin turnover now happens about six times a month, roughly double the frequency of two years ago. That velocity explains how transaction records can be broken while aggregate supply shrinks. Visa's metrics peg stablecoin velocity at 13.56 per quarter, compared with 1.65 for traditional U.S. M1 money supply. Each stablecoin dollar circulates about eight times faster than conventional bank money.
Where did the capital go? A portion shifted into tokenized Treasury instruments, which offer yield that payment stablecoins cannot. The GENIUS Act, enacted in July 2025, explicitly bans payment stablecoin issuers from distributing yield. That regulatory restriction reduces the incentive to hold idle stablecoin balances.
Tokenized Treasury products expanded to nearly $16 billion by late July. Circle's USYC approached $3 billion; BlackRock's BUIDL reached about $2.64 billion. Total tokenized asset market cap rose 1.75% to $30.1 billion in June, even as stablecoin supply shrank.
Public data cannot trace the full $7.7 billion to those products. Some capital may have returned to traditional bank deposits or left crypto markets entirely.
The GENIUS Act framework becomes enforceable on January 18, 2027, or 120 days after regulators publish final rules. As of July 28, those implementing regulations were not complete. A collaborative federal proposal would require stablecoin issuers to verify customer identities. The public comment period closes August 21. The FDIC released proposed reporting requirements on July 17.
DefiLlama's tracking put total stablecoin market cap at about $309.9 billion on July 28, a 0.79% drop over the preceding 30 days.
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