The market value of stablecoins shrank by US$7.7 billion, but the transaction volume reached US$1.79

In June 2026, the stablecoin market shrank, but trading volume hit a new high.

In June 2026, the market value of the stablecoin market shrank by approximately US$7.7 billion, and the total market value dropped to approximately US$312 billion. Adjusted trading volume for the month reached US$1.79 trillion, a record high, an increase of 63% from May. Of this, USDC processed approximately $1.21 trillion and USDT processed approximately $576 billion.

According to data on July 6, the market value of stablecoins fell 2.39% from the previous month, to approximately US$7.7 billion to US$312 billion. This was the first month-end decline in five months and the largest monthly dollar decline since the Terra-Luna crash in May 2022.

However, the decline in supply did not lead to a simultaneous decline in chain activity. A payment institution's data panel showed that adjusted transaction volume reached US$1.79 trillion in June, an increase of 63% from May and an increase of 125% from June 2025. Among them, USDC contributed approximately US$1.21 trillion and USDT approximately US$576 billion.

It has been previously reported that as of mid-July, the market value of stablecoins has dropped by about US$10 billion from its peak in May. Another data platform showed on July 28 that the total market value of stablecoins was approximately US$309.9 billion, down 0.79% in 30 days. USDT still ranks first with a market value of approximately $183.9 billion, followed by USDC with approximately $73.7 billion.

The decline in the stablecoin market is moderate, not in the same breath as the Terra incident

The term "biggest drop since Terra" refers to the amount of the dollar that fell in June rather than the severity of the incident. The monthly decline of 2.39% is much smaller than the 2022 crash. According to statistics from another data platform, in the second quarter of 2022, with the collapse of UST and the collapse of the crypto credit market, the market value of major stablecoins evaporated by US$33.9 billion, a drop of nearly one-fifth.

June 2026 also lacked the hallmark feature of the Terra crisis: massive market unanchoring. Data shows that on July 28, both USDT and USDC were trading close to US$1. The contraction is due to a decrease in circulation supply rather than a sharp drop in token prices.

Different data providers have different statistical results due to different asset ranges and classification rules. A data platform measured a market value of US$312 billion at the end of June; another platform's second-quarter report showed that the total market value at the end of the quarter was US$305.1 billion, a quarterly decline of US$4.8 billion (1.6%), and said this was the first quarterly contraction since the third quarter of 2023.

This difference makes the statement that "the market has shrunk for the first time in four years" too broad. One data platform recorded the first monthly decline in five months, while another recorded the first quarterly decline since the third quarter of 2023. Both show a market correction, but neither supports viewing June as the first contraction of any kind since Terra.

Record trading volume reflects accelerating capital turnover, not just payments

The adjusted transaction volume data of a payment institution is more reference value than the original on-chain transaction volume, but it is not a pure payment indicator. The data panel excludes known robot activities, intra-exchange transfers, redundant smart contract operations, and wallets for high-frequency or large-value transactions, and only counts the largest stablecoin transfer amount in complex transactions.

However, the adjusted classification still includes exchange replenishment, decentralized exchange trading, lending, investment funds, casting and destruction, and deposit and withdrawal activities. Therefore, the $1.79 trillion total measures filtered economic activity and should not be described as $1.79 trillion in goods purchases, remittances, or merchant settlements.

June data still shows a clear divergence between supply and use. USDC, with less than half the circulation supply of USDT, handles approximately $1.21 trillion in transactions; while USDT, despite its larger market capitalisation, only handles approximately $576 billion. It has been previously reported that USDC has continued to lead USDT in adjusted transfer value.

When each token is traded more frequently, smaller liquidity can also support greater trading volume. Record trading volume in June combined with a decline in supply indicated an increase in capital turnover. But this did not say who sent the funds, why they were transferred, or whether the activity generated payment revenue.

An independent analysis revealed measurement gaps. The agency estimates that identifiable stablecoin payments in 2025 will be approximately US$390 billion, accounting for approximately 0.02% of total global payments. Among them, B2B payments are approximately US$226 billion, and most of the total transaction volume on the chain comes from transactions, internal transfers and automation activities. The use of stablecoins is growing, but filtered on-chain activity and actual payments are still different data sets.

Income-based products may only explain the flow of some funds to

The expansion of tokenized treasury bonds products provides a possible destination for some funds leaving non-yielding stablecoins. According to statistics from a data platform, the value of tokenized U.S. Treasury bonds in late July was approximately US$16.2 billion. Another data showed that on July 28, Circle's USYC was approximately US$3 billion, and BlackRock's BUIDL was approximately US$2.64 billion.

The fund rotation argument has its economic foundation. Payment stablecoins are designed to maintain fixed value and usually do not allocate reserve income directly to holders. Tokenized treasury bonds can provide exposure to short-term government debt on the chain. Therefore, fund managers may deposit idle balances in income-based products and convert them into stable currencies when settlement is pending.

However, public data cannot prove that all US$7.7 billion went into tokenized funds. Total growth cannot be traced back to every purchase. Funds may also flow back into bank deposits, be used for cryptocurrency sales, flow into excluded categories, or leave the digital asset market.

A data platform found that the total market value of tokenized assets increased by 1.75% to US$30.1 billion in June, while the supply of stablecoins declined. This supports the general trend of shifting towards tokenized financial products, but does not demonstrate a direct one-to-one shift.

Another data platform also found that some crypto-dollars linked to earnings shrank in the second quarter. USDS fell 16.4%, and USDe fell 24.4%. The platform attributed the decline in part to the fact that the yield was lower than the risk-free interest rate, which led to users debooking related products. Evidence suggests that funding rotations are selective rather than consistent towards income-based products.

U.S. regulatory rules and July issuance will determine the next step

The regulatory background is not yet complete. The GENIUS Act was enacted on July 18, 2025, establishing a federal framework for paying stablecoin issuers. The rules proposed by the Office of the Comptroller of the Currency cover reserves, redemption, risk management, reporting, custody and supervision.

The law is scheduled to take effect on January 18, 2027, or 120 days after federal regulators issue final implementing rules, whichever comes first. As of July 28, regulators have not yet completed the formulation of all rules. According to previous reports, the one-year rulemaking deadline has passed and many proposals are still awaiting final action.

One expiring deadline involves customer identification. A joint federal proposal requires approved issuers of payment stablecoins to establish risk-based procedures to identify and verify customers. The deadline for comment feedback is August 21, 2026.

The Federal Deposit Insurance Corporation also released the proposed reporting form on July 17, with a feedback period within 60 days of publication in the Federal Register. These forms will establish regular financial and operational reporting systems for issuers of payment stablecoins regulated by the FDIC.

These rules may change where stablecoins are issued and held, and may also affect competition between U.S. -oriented products (such as USDC) and offshore products (such as USDT). In related reports, industry groups have disputed whether the proposed rules excessively extend revenue limits to third-party reward plans.

The next piece of evidence comes from the issuer's casting and destruction data, month-end supply, anchoring stability and adjusted trading volumes. If net issuance is resumed, it supports the view that June is a temporary correction; if redemption continues, it indicates that dollar liquidity in the chain faces a longer-term contraction.

June data supports two conclusions: the supply of stablecoins is weakening, but the remaining coins are flowing at a record adjusted rate. Market value measures the size of liquidity, while adjusted trading volume measures liquidity activity. The two cannot be substituted for each other.