The global stablecoin market has entered a new era of expansion and competition, with Tether’s USDT crossing a historic threshold and financial and tech titans racing to capture market share. On May 13, 2025, DeFiLlama data revealed that the total stablecoin market cap reached $242.8 billion**, with **USDT’s market value soaring past $150.6 billion—accounting for 62% of the sector. Circle’s USDC followed with nearly 25% market share, solidifying the dominance of these two leaders while new players accelerate innovation across payments, infrastructure, and real-world asset (RWA) integration.
This surge reflects growing institutional confidence and broader adoption in cross-border transactions, decentralized finance (DeFi), and everyday digital payments. As regulatory clarity improves—especially in the U.S.—major fintech firms, traditional banks, and blockchain-native platforms are launching or expanding stablecoin initiatives, signaling a transformative phase for digital dollars.
Tech Giants Enter the Fray: Stripe, PayPal, and Coinbase Lead Innovation
Stripe: Programmable Stablecoins and Global Business Accounts
On May 7–8, Stripe launched “Stablecoin Financial Accounts,” enabling businesses in 101 countries to hold balances in stablecoins. This move lowers friction for international commerce by allowing instant settlement without currency conversion delays.
Even more impactful was the debut of USDB, a programmable stablecoin built on Bridge—a platform Stripe acquired in February 2025 for $1.1 billion. Developers can now embed USDB into apps, create custom payment flows, and earn rewards for contributing to its ecosystem.
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USDB works seamlessly with existing infrastructure: Visa recently issued a stablecoin-enabled payment card through Bridge, demonstrating how legacy systems can integrate with blockchain rails. With this strategy, Stripe is positioning itself as a bridge between Web2 finance and Web3-native economies.
PayPal: Incentivizing Adoption with Yield
Starting in 2025, PayPal began offering a 3.7% annual percentage yield (APY) on PYUSD holdings within PayPal and Venmo wallets. This incentive encourages users to hold rather than transact away their stablecoins, increasing platform engagement and liquidity.
While current yields apply only to in-wallet balances, analysts expect PayPal to expand PYUSD utility—potentially integrating it into peer-to-peer transfers, merchant payments, and DeFi-like savings products. Such moves could significantly boost stablecoin adoption among mainstream consumers.
Coinbase: Building Internet-Native Payment Standards
On May 6, Coinbase introduced x402, a new stablecoin payment standard designed for AI agents, APIs, and decentralized applications. Unlike traditional card networks, x402 enables atomic settlements—ensuring that transactions either complete fully or fail cleanly—critical for machine-to-machine commerce.
This protocol aims to become the foundational layer for autonomous economic activity online, where AI bots can pay for services like cloud computing, content access, or API usage using stablecoins—without human intervention.
Meta: Reentering Crypto with Creator-Focused Stablecoin Plans
After shelving its Libra/Diem project in 2022, Meta is quietly reengaging with stablecoins. According to Fortune, the company is in early discussions with multiple crypto firms about using stablecoins to pay global creators—reducing cross-border fees and settlement times.
Ginger Baker, former Plaid executive and now Meta’s VP of Product, has been spearheading this initiative since January 2025. While no official product has launched yet, Meta’s vast user base—over a billion on Instagram and Facebook—makes any future stablecoin integration highly consequential.
MoneyGram: Bridging Cash Networks with Stablecoins
On May 7, MoneyGram unveiled “MoneyGram Ramps,” a cash on/off-ramp supporting stablecoins across 170+ countries. Leveraging its extensive physical network of retail locations, MoneyGram allows users to convert cash into digital dollars and vice versa—making stablecoins accessible even in underbanked regions.
This hybrid model combines traditional financial access points with blockchain efficiency, offering a practical path to financial inclusion.
Payment Titans Respond: Mastercard and Visa Embrace Stablecoins
Mastercard Expands Stablecoin Spending Access
On April 28, Mastercard announced partnerships with Circle, OKX, Paxos, and others to let consumers spend their stablecoin balances directly via Mastercard debit or credit cards. For merchants, the system settles transactions in USDC, streamlining reconciliation and reducing volatility risk.
This integration means users don’t need merchants to accept crypto natively—they simply use their card as usual while funds are drawn from their digital wallet.
Visa Enables Stablecoin-Backed Cards via Bridge
Just two days later, on April 30, Visa joined forces with Stripe’s Bridge to allow fintech developers to issue Visa cards linked to stablecoin wallets. These cards let users spend USDC or other dollar-pegged tokens at any merchant accepting Visa—effectively turning stablecoins into everyday spending tools.
These developments mark a pivotal shift: instead of waiting for mass crypto adoption, payment giants are bringing stablecoins into existing financial rails—dramatically lowering entry barriers.
Market Leaders Strengthen Their Moats: Circle and Tether
Circle: Pushing Institutional Adoption Forward
On April 21, Circle launched the Circle Payments Network, partnering with global banks and fintech startups to modernize international transfers. By replacing outdated SWIFT messaging with real-time blockchain settlements, Circle aims to cut costs and processing times for cross-border payments.
Even more significant was its April 1 filing for an IPO on the New York Stock Exchange (NYSE)—a milestone that legitimizes stablecoins in the eyes of regulators and traditional investors alike.
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Tether: Scaling Across Chains While Planning U.S. Expansion
Despite seeing its market share dip from 70% to 62% over the past year due to rising competition, Tether remains the dominant force in stablecoins. Its USDT issuance now exceeds $150 billion, driven by aggressive multi-chain expansion strategies.
Tether has implemented LayerZero OFT to enable seamless USDT transfers across blockchains and built the Legacy Hub and Plasma infrastructure to enhance scalability and interoperability. Additionally, Tether plans to launch a new U.S.-regulated dollar-backed stablecoin later in 2025, aiming to strengthen compliance and attract institutional capital.
Emerging Innovators: Ondo, Paxos, Ethena, and New Entrants
Ondo Finance: Bridging RWA Tokens Across Ecosystems
On April 18, Ondo Finance listed its U.S. Treasury-backed stablecoin USDY on the Stellar blockchain. In May, it launched a cross-chain bridge enabling seamless transfers between EVM chains and Solana—marking the first such solution for tokenized real-world assets (RWA).
On May 12, USDY became available on Latin American exchange TruBit, serving users in Mexico, Argentina, Brazil, Peru, and Colombia—expanding access to yield-generating digital dollars in emerging markets.
Paxos Launches Global Dollar Network Alliance
Paxos co-founded the Global Dollar Network, an open consortium including Anchorage Digital, Kraken, Robinhood, Nuvei, and Galaxy Digital. Visa joined on April 14, and by May 12, the alliance had grown to include 19 members, such as BitMart and Zodia Custody.
The network aims to standardize interoperability and increase global usage of regulated dollar-backed tokens.
Ethena Labs: Synthesizing Stability Through Innovation
Launched in December 2024, Ethena’s USDtb uses a novel approach: 90% of reserves are invested in BlackRock’s tokenized fund BUIDL, partnering with Securitize for asset tokenization. Its synthetic dollar USDe has rapidly grown to become the third-largest pegged asset with a market cap of $4.74 billion.
Recent integrations include:
- Mainnet launch of Converge, an RWA-focused chain built on Arbitrum and Celestia
- Partnership with TON Blockchain, bringing USDe to Telegram’s billion-user base
- Listing on trading platforms Hyperliquid and HyperEVM
Ethena also publishes weekly proof-of-reserves, enhancing transparency amid growing scrutiny over reserve backing.
Traditional Banks Join the Race: Bank of America & Standard Chartered
Bank of America Signals Regulatory Readiness
On May 3, Bank of America stated it would issue its own stablecoin if Congress passes enabling legislation. CEO Brian Moynihan affirmed: “We’ll enter this space as soon as it’s legally permissible.” As the second-largest U.S. lender, its potential entry could bring massive credibility and scale.
Standard Chartered Pursues Hong Kong Stablecoin
In February, Standard Chartered (Hong Kong) partnered with Animoca Brands and HKT to form a JV seeking approval from the Hong Kong Monetary Authority (HKMA) to issue a Hong Kong dollar-pegged stablecoin—highlighting Asia’s growing role in digital currency innovation.
FAQ Section
Q: What is driving the growth of stablecoins in 2025?
A: Regulatory progress, institutional interest, yield incentives (like PYUSD), improved interoperability (via bridges and standards like x402), and integration with major payment networks like Visa and Mastercard are accelerating adoption.
Q: Is USDT safe despite its dominance?
A: Tether has improved transparency with regular attestations and diversified reserves. However, investors should always assess counterparty risk and diversify holdings across multiple regulated options like USDC or upcoming compliant entrants.
Q: How do yield-bearing stablecoins work?
A: Platforms like PayPal or Ethena generate yield by investing reserves in short-term Treasuries or tokenized assets. Users earn interest without managing complex DeFi positions.
Q: Can traditional banks really compete with crypto-native issuers?
A: Yes—banks bring trust, compliance frameworks, and customer bases. Their challenge lies in speed and agility compared to tech-first innovators.
Q: What role do real-world assets (RWA) play in stablecoins?
A: RWAs like U.S. Treasuries provide secure backing for tokens like USDY or BUIDL-linked USDtb, combining blockchain efficiency with tangible value—key for long-term stability.
Q: Will stablecoins replace traditional payment methods?
A: Not immediately—but they’re becoming complementary tools. Integration with Visa/Mastercard shows a hybrid future where digital dollars coexist with fiat rails.
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