Surge in Stablecoins: Supply Reaches $315B as Institutional Investments Boost USDC

As of the first quarter of 2026, Circle's USDC stablecoin has seen an increase of approximately $2 billion in supply. This growth has put it ahead of its competitor, Tether, at a time when the larger crypto market is experiencing a contraction. This marks the most significant difference between these two leading stablecoin providers since the bear market of mid-2022.

Key Takeaways

Circle's USDC has increased by $2 billion in supply, surpassing Tether's $3 billion decline.
Total stablecoin supply rose to $315 billion, despite slower growth rates compared to previous periods.
Stablecoins accounted for 75% of all crypto trading activity in Q1 2026.
Yield-bearing stablecoins are becoming increasingly popular, valued at approximately $3.7 billion.
Retail-sized transactions dropped by 16%, indicating diminishing participation from individual users.

Stablecoin

USDC's Growth Compared to Tether's Decline

While USDC has increased in value, Tether's USDT has decreased by nearly $3 billion in the same timeframe. Recent reports indicate that USDC is gaining momentum in trading and on-chain activities, with transaction volumes hitting a record high in February. This trend reflects a growing preference from institutions for a US-regulated issuer as legislative efforts regarding stablecoins are advancing in Congress.

By the close of March, the total stablecoin supply had reached $315 billion, which is an increase of about $8 billion from the previous quarter, according to data from CEX.io. Although the growth rate is slower than at any time since late 2023, it still represents growth during a period when many areas of the crypto market are shrinking.

Stablecoin Transaction Trends

According to CEX.io, stablecoins now account for a larger portion of the overall cryptocurrency trading volume compared to their peak in 2022. Additionally, stablecoins represented 75% of all crypto trading activity in the first quarter, marking the highest share ever recorded. Data indicates that investors have shifted towards dollar-pegged assets as a cautious strategy, preferring to remain within the crypto market rather than exit entirely.

In total, the transaction volume for stablecoins in this quarter surpassed $28 trillion, which is more than the combined transaction value processed annually by Visa and Mastercard.

Growth of Yield-Bearing Stablecoins

A crucial aspect of the new issuance of stablecoins was driven not by USDC or USDT but rather by yield-bearing stablecoins — products that offer returns similar to traditional interest-earning accounts. This sector is currently valued at approximately $3.7 billion, with daily trading volumes exceeding $100 million, according to CoinGecko.

Yield-Bearing Stablecoins

The increasing popularity of these yield-bearing products has faced resistance from traditional banks, which have been lobbying Congress against stablecoins offering returns. They argue such products operate more like financial instruments rather than payment solutions. The outcome of this ongoing debate could significantly impact the growth potential of yield-bearing stablecoins in the US market.

Bitcoin Trading Trends

However, not all statistics from the quarter were positive. Retail-sized transfers, which are linked to individual users, saw a decline of 16%, representing the largest single-quarter drop on record. This gap was largely filled by automated trading and algorithmic activities, which accounted for around 75% of all stablecoin transaction volumes during the period.

CEX.io's report suggests that the overall landscape is one of structural growth amid pressure — a market increasingly driven by institutional and automated flows, even as everyday participation appears to be waning.

Featured image from Meta, chart from TradingView