The stablecoin market has continued its rapid rise, with total capitalization reaching a record high above $314 billion, as growth in Tether’s USDT and Circle’s (CRCL) USDC led the way, according to broker Canaccord Genuity.
With the GENIUS Act in effect, compatible stablecoins like USDC are now treated on par with cash by the US government, a move that Canaccord believes is fueling both momentum and confidence in the sector.
This regulatory clarity strengthens the medium-term case for stablecoins becoming “monetized” on 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 the cryptocurrency markets and they provide a payment infrastructure and are also used to transfer money internationally.
Even with this growth, the analysts noted that the market remains underpenetrated relative to the theoretical total addressable market of the US M2 money supply, leaving significant room for expansion through 2026 as new players and use cases emerge beyond traditional crypto trading.
The broker pointed to a more competitive landscape taking shape 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.
However, with most stablecoin profits currently going to Tether, Canaccord observed that other financial heavyweights are looking to chip away at the 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 expected, reinforcing its view that competition is intensifying.
Although stablecoins do not have a direct, mechanical link to bitcoin the report argued that their adoption will act as a catalyst for the broader crypto-economy.
As stablecoins integrate more deeply 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 Stablecoins emerging as core payment infrastructure
