Stablecoin market capitalization fell by $7.7 billion in June, recording its largest monthly decline since the Terra-Luna collapse.

Even with the smaller supply, adjusted stablecoin transaction volume rose to a record $1.79 trillion, underscoring stronger settlement activity. Investors also moved idle stablecoins into tokenized Treasury funds as new yield restrictions continued to reshape the market.

The stablecoin market lost $7.7 billion in June, its biggest monthly drop since the Terra-Luna collapse in May 2022. Total market capitalization also fell by about $10 billion from its May peak to roughly $300 billion. Adjusted transaction volume, however, climbed to a record $1.79 trillion in the same month, showing continued expansion in settlement activity despite the lower circulating supply.

Market Cap Falls as Usage Reaches a New High

June's decline cut the stablecoin market by about 3% from its May peak. That was still far smaller than the 26% contraction seen during the 2022 Terra collapse.

Tether's USDT supply dropped from about $190 billion in May to roughly $184 billion. USDC also declined from its March peak near $80 billion to approximately $74 billion.

Trading firm Wincent's Paul Howard said the decline represented a relatively small pullback within the broader market. At the same time, adjusted transaction volume increased 63% from May and 125% from June last year, reaching the record $1.79 trillion. The gap between lower supply and higher transfer volume highlights how stablecoins are being used more as a payments and settlement rail than as a static store of value, even as issuance levels fluctuate.

Yield Rules Shift Idle Stablecoin Holdings

The supply decline came alongside changes introduced under the GENIUS Act, which was signed in July 2025. The law prevents payment stablecoin issuers from offering yield, while the Office of the Comptroller of the Currency proposed extending similar restrictions to affiliated entities.

Marquette University's David Krause said investors instead moved idle balances into tokenized Treasury funds that generate returns. Tokenized Treasury assets have grown to nearly $16 billion, while Circle's USYC overtook BlackRock's BUIDL and JPMorgan's offering expanded 87% in one month. That shift is relevant for the wider market because it shows how policy and product design can influence where stablecoin liquidity sits, without changing the underlying need for dollar-denominated digital balances.

Faster Turnover Changes Market Metrics

Standard Chartered analyst Geoff Kendrick said stablecoin turnover reached about six times each month, nearly double the pace seen two years ago. Visa measured stablecoin velocity at 13.56 per quarter, compared with 1.65 for U.S. M1 money supply.

USDC also processed larger settlement volumes than USDT despite having a smaller supply. In the first half of 2026, USDC handled about 70% of adjusted transaction volume, while USDT accounted for roughly 25%.

Visa said its stablecoin settlement business reached a $7 billion annualized run rate across nine blockchains. Mastercard also expanded support to six stablecoins operating across eight blockchain networks, reflecting broader payment-network participation as settlement activity becomes a larger part of the stablecoin market's footprint.