Global stablecoin supply growth has largely stalled following a period of rapid expansion, according to Axis co-founder Jimmy Xue.
Xue said tighter regulation and liquidity constraints are pushing the market into a consolidation phase.
Regulatory frameworks in the United States and Europe have increased compliance costs for institutional stablecoin issuers.
Issuers are being required to hold higher-quality reserves, reducing the pace of new issuance.
Rising yields on US Treasurys have increased the opportunity cost of holding non-yielding stablecoins.
Xue said this dynamic has reduced speculative minting and reinforced stablecoins’ role as payment and settlement infrastructure.
“The recent plateau in stablecoin market cap is primarily a consolidation phase following the explosive growth of 2025,”
Jimmy Xue said.
He added that stricter liquidity rules under the US GENIUS Act and the EU’s Markets in Crypto-Assets framework are reshaping issuance behaviour.
Industry data shows total stablecoin supply has remained near $310bn since October.
Stablecoin circulation had more than doubled between January 2024 and early 2025.
Supply growth slowed after a sharp crypto market sell-off triggered large-scale deleveraging in October.
Reduced risk appetite and falling leverage have lowered demand for new stablecoin issuance.
Debate over yield-bearing stablecoins has intensified in the United States amid discussions over the CLARITY Act.
Banking groups have warned that yield-bearing stablecoins could compete with traditional deposits.
“The banking industry’s concerns over stablecoin yields are totally absurd,”
Jeremy Allaire said.