The stablecoin market continued its rapid ascent, with overall capitalization reaching an all-time high of over $314 billion, as the growth of Tether’s USDT and Circle’s USDC (CRCL) led the way, according to broker Canaccord Genuity.
With the GENIUS Act coming into effect, compliant stablecoins such as USDC are now treated equally to cash by the US government, a move that Canaccord believes fuels both momentum and confidence in the sector.
This regulatory clarity strengthens the medium-term case for stablecoins becoming the “monetary layer” of the internet, analysts led by Joseph Vafi said in the report on Wednesday.
Stablecoins are cryptocurrencies whose value is tied to another asset, such as the US dollar or gold. They play a major role in cryptocurrency markets, providing payment infrastructure, and are also used to transfer money internationally.
Even with this growth, analysts have 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 new use cases emerge beyond traditional crypto trading.
The broker highlighted that a more competitive landscape is emerging as large financial institutions develop stablecoin strategies.
In the third quarter, Tether announced plans to launch a U.S.-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 most stable profits currently going to Tether, Canaccord has observed other financial heavyweights looking to chip away at 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 company’s analysts expected, reinforcing the view that competition is intensifying.
Although stablecoins do not have a direct, mechanical link to bitcoin the report argues that their adoption will act as a catalyst for the broader crypto economy.
As stablecoins become more deeply integrated into global payment and settlement flows, they can accelerate investments 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 rests, Canaccord said.
Learn more: DWS sees stablecoins becoming core payment infrastructure
