Global investment bank Standard Chartered has published a pivotal analysis revealing a significant shift in stablecoin market dynamics. According to a report dated March 2025, the velocity of stablecoins—how often they are used relative to the amount outstanding—has doubled over the past two years. This acceleration is driven by new payment use cases and rising traditional finance (TradFi) activity.
This trend challenges earlier assumptions that stablecoin velocity would remain broadly stable as the market expanded. Geoff Kendrick, Standard Chartered's head of crypto research, explained the implications: "If velocity remains constant, rising transactions will create demand for more stablecoins, but if it increases, that will not be the case." He added, "If velocity increases, however, that would be assumed to reduce the need for the total number of stablecoins required."
Despite this potential dampening effect on demand, the bank maintains its forecast that the total stablecoin market will reach $2 trillion by late 2028.
The surge in velocity is not uniform across all stablecoins. The sharp increase, reaching an average turnover of at least six times per month, has been primarily driven by Circle's USD Coin (USDC). Its velocity began rising notably in mid-2024 across all blockchain networks, with particularly strong activity on Solana and Base. Kendrick attributes this to a gradual shift toward higher-velocity TradFi replacement and early AI-related agentic payments.
In stark contrast, Tether's USDt (USDT) has maintained a relatively low and stable velocity. This reflects its entrenched position in the lower-velocity emerging market (EM) savings use case, where it is held as a store of value and inflation hedge. "The two market leaders appear to have different strengths by use case — EM savings for USDT and TradFi replacement for USDC," Kendrick concluded.
The analysis highlights a clear geographical and functional bifurcation in the stablecoin landscape. While emerging markets use stablecoins primarily for savings, developed markets and DeFi ecosystems are leveraging them for frequent transactions. This rising efficiency suggests the market is maturing, where existing supply can facilitate greater economic activity without necessitating proportional supply growth.
