Stablecoin Market Cap Surges Past $200B as U.S. Treasury Eyes Role in Dollar Dominance
The stablecoin market has seen explosive growth following the U.S. election, driven by shifting economic policies and a new Treasury-backed strategy to reinforce the dollar’s global standing.
For the first time ever, the combined market capitalization of the top five stablecoins has surpassed $200 billion. This milestone comes after U.S. Treasury Secretary Scott Bessent announced plans to integrate stablecoins into efforts to maintain the greenback’s dominance as the world’s reserve currency.
According to data from Glassnode, stablecoins collectively hit a peak market cap of $205 billion, with demand accelerating as investors sought safety from the recent downturn in bitcoin (BTC) and ether (ETH).
Since President Donald Trump’s election victory, the stablecoin sector has expanded by $40 billion, outperforming both traditional equities and cryptocurrencies during a period of heightened volatility.
Tether’s USDT, the dominant stablecoin, has remained steady at a $140 billion market cap, while Circle’s USDC has surged to nearly $60 billion—gaining $25 billion since the election.
During the Digital Asset Summit on Friday, Bessent emphasized the role of stablecoins in the U.S. economic strategy, stating, “We are committed to ensuring the U.S. dollar remains the world’s reserve currency, and stablecoins will play a crucial role in that mission.”
Bessent’s comments reflect growing concerns about macroeconomic uncertainty and declining foreign demand for U.S. Treasuries, particularly from Japan and China—the two largest holders of U.S. debt—both of which have been reducing their positions.
To sustain the dollar’s dominance, continuous demand for U.S. debt is essential. The current administration sees stablecoins as a strategic tool in this effort, given their reliance on U.S. dollar reserves to maintain their pegs.
By holding U.S. Treasuries as collateral, stablecoin issuers not only help stabilize crypto markets but also support the broader economy by keeping Treasury yields in check. Tether, for example, has already become one of the largest holders of three-month U.S. government bonds, highlighting the growing synergy between digital assets and traditional finance.
