The stablecoin market has continued its rapid rise, with the overall capitalization reaching an all-time high of more than $314 billion as growth in Tether’s USDT and Circle’s USDC (CRCL) led the way, according to broker Canaccord Genuity.
With the GENIUS Act in place, compliant stablecoins like USDC are now treated the same as cash by the US government, a move Canaccord believes is boosting both momentum and confidence in the sector.
This regulatory clarity strengthens the medium-term argument for stablecoins becoming the “monetary layer” of the internet, analysts led by Joseph Vafi said in Wednesday’s report.
Stablecoins are cryptocurrencies whose value is pegged to another asset, such as the US dollar or gold. They play an important role in the cryptocurrency markets as they provide payment infrastructure and are also used to transfer money internationally.
Even with this growth, analysts noted that the market remains underpenetrated relative to the theoretical total addressable market of US M2 money supply, leaving significant room for expansion through 2026 as new entrants and use cases emerge beyond traditional cryptocurrency trading.
The broker noted that a more competitive landscape is brewing as major financial institutions outline stablecoin strategies.
In the third quarter, Tether announced plans to launch a US-regulated dollar stablecoin called USAT by the end of 2025. As the largest player in the market with nearly 70% share, Tether is looking to raise between $15 billion and $20 billion to support its expansion.
But with the majority of stablecoin profits currently accruing to Tether, Canaccord noted that other financial heavyweights are looking to reduce its lead. The CEO of Citigroup (C) said the bank is exploring its own stablecoin initiative, while Visa (V) announced plans to launch a stablecoin pilot in April 2026.
Meanwhile, USDC circulation is growing faster than the firm’s analysts had anticipated, reinforcing their view that competition is intensifying.
Although stablecoins have no direct mechanical link to bitcoin the report argued that its adoption will act as a catalyst for the broader crypto economy.
As stablecoins become more deeply integrated into global payments and settlement flows, they can accelerate investment in core infrastructure, from digital wallets and custody solutions to the next generation of decentralized finance (DeFi) applications.
This creates a reinforcing loop: As stablecoins become more integrated into the financial system, they also strengthen the rails on which the broader crypto industry is built, Canaccord said.
Read more: DWS sees the rise of stablecoins as central payments infrastructure
