On-chain data reveals a dramatic acceleration in stablecoin activity across the Ethereum ecosystem, with two key narratives emerging: explosive growth on Layer 2 scaling solution Arbitrum and a new all-time high for the Ethereum mainnet.
Arbitrum, a leading Ethereum Layer 2, has seen its quarterly USDC transfer volume surge by approximately 80% year-over-year. Data from Token Terminal shows a clear step-change in usage, with volumes climbing from minimal levels in Q1 2023 to reaching roughly $250–$280 billion per quarter by early 2025. This growth signifies Arbitrum's evolution from an experimental DeFi venue to a major settlement layer for dollar-denominated transactions, with sustained high volumes across consecutive quarters indicating deep liquidity and repeat usage.
Simultaneously, the Ethereum mainnet processed over $8 trillion in stablecoin transfers in Q4 2025 alone, setting a new network record. According to analysis, Ethereum powered around 57% of all stablecoins issued in 2025, maintaining its position as the primary channel for on-chain dollars despite competition from chains like Tron and Solana. Research from DefiLlama indicates the Ethereum stablecoin supply reached approximately $170 billion in late 2025, more than double its early‑2024 levels.
The stablecoin landscape on Ethereum is dominated by Tether's USDT and Circle's USDC, which combined account for most of this volume. The network also hosts newer entrants like Ethena's USDe. Ethereum's dominance is supported by regulatory clarity in the U.S. and deep DeFi liquidity. However, the network faces pressure to control fees and congestion, with upcoming upgrades like the 2026 "Hegota" improvement aimed at maintaining usability. The record stablecoin activity contrasts with ETH's price performance, which ended 2025 down 12% year-on-year, though it has started 2026 strongly, up 7.8% in the past week to trade above $3,100.
