Stablecoin Holdings Hit All-Time High as Market Growth Stalls

Stablecoin liquidity is showing a divergence, according to CryptoQuant data. While the weekly issuance of new stablecoins has slowed significantly to a pace of about $1.1 billion—a stark contrast to the $4-8 billion inflows from late 2024—the amount of stablecoins held on centralized exchanges has reached a record high of $68 billion.

This indicates that while new capital inflows are decelerating, a substantial amount of “dry powder” is already sitting on exchanges, particularly on Binance which dominates daily inflow transactions. The report concludes that this dynamic suggests the market is not set for a broad, parabolic run, but rather a period of consolidation with the potential for selective, tactical rallies.

For more than a decade, stablecoins have offered the promise of the benefits of cryptocurrency with stability of the U.S. dollar —an ideal stablecoin would always be worth $1.

However, as Congress considers historic legislation related to these assets, worth more than $250 billion as of August 2025, research reveals a problem with their models: the more effort they make to maintain their dollar peg, the more vulnerable they may be to catastrophic runs.

New research from the National Bureau of Economic Research (NBER) has raised concerns about a critical flaw in stablecoin design. The study suggests that the very mechanisms used to maintain a stable $1 peg may increase the tokens’ vulnerability to panic-driven runs, challenging the belief that more competition in the stablecoin market improves stability.

The findings highlight a trade-off: while stablecoins are effective at maintaining day-to-day stability, their structure may weaken their ability to recover during periods of financial stress. This research emerges as the Trump administration is actively promoting stablecoin legislation to secure U.S. dollar dominance.

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