Stablecoin Dominance Drops Amid Global Regulatory Shifts
Stablecoin dominance has been fluctuating, with market share dropping from 84% to 77% since November. Meanwhile, global regulators are stepping in, reshaping the stock market and paving the way for wider adoption.
In the U.S., the Senate is poised to vote on the Genius Act, a stablecoin bill that aims to impose regulations akin to those for traditional finance institutions. Across the globe, stablecoins are facing increased scrutiny. In Korea, traders have turned to stablecoins for refuge amidst political instability, while in Brazil, a proposed ban on self-custodial stablecoins has led to users cashing out.
Regulated stablecoins have been steadily growing year-to-date, with most of USDT's post-election gains occurring between November and December 2024. Despite the volatility, altcoins are primarily traded against stablecoins, though their demand has dipped recently. USDT's demand remains robust in Turkey, where inflation is notably higher than in most other countries.
In South Korea, stablecoin-related trades accounted for about 17% of all volume on Bithumb and Upbit in February 2025, marking an all-time high for these platforms. Regulatory clarity is improving, with plans to regulate stablecoin-to-fiat cross-border transactions. Globally, regulators are tightening controls, setting the stage for broader adoption. In Europe, MiCA regulations have already driven significant changes in the EUR stablecoin market.
Stablecoin dominance has weakened, but their role in the stock market today remains substantial. As regulators worldwide step in, the stablecoin landscape is evolving, with users seeking refuge in these assets amidst uncertainty and volatility. The future of stablecoins appears to be one of increased regulation and broader adoption.
