Tether Cuts USDT by $5.5B as Stablecoin Turnover Spikes

Tether reduced the supply of USDT by about $5.5 billion between May 1 and July 29, while overall stablecoin market value fell roughly $13.9 billion from its May peak to about $308.5 billion. June marked the largest monthly contraction in stablecoin supply since May 2022.

USDT outstanding declined from about $189.5 billion at the start of May to roughly $184 billion at the end of July. Circle’s USDC also fell over the same period, from $77.27 billion to $72.41 billion. Total stablecoin supply dropped by $7.7 billion in June alone, the biggest monthly decrease recorded since the Terra collapse in 2022.

On-chain activity accelerated as supply contracted. Adjusted stablecoin transaction volume reached $1.83 trillion in June, a 60% increase from May and more than double the level a year earlier. USDC accounted for about $1.21 trillion of that adjusted volume in June, while USDT handled roughly $576 billion.

Analysts warn that raw transfer counts can overstate economic activity because automated processes, internal exchange movements and wash trading inflate totals. Separate industry estimates put identifiable real-world payments at about $390 billion in 2025, with business-to-business transactions near $226 billion and payroll and remittances around $90 billion.

A March 2026 analysis by Standard Chartered estimated that stablecoins now turn about six times per month, roughly double the frequency seen two years earlier. Payment network data indicate a stablecoin dollar moves more frequently on-chain than a dollar held in a conventional U.S. bank account.

Capital has shifted in part into tokenized U.S. Treasury products, which grew to about $16 billion from roughly $11 billion in March. Legislative changes contributed to that flow: the GENIUS Act, enacted in July 2025, bars issuers from paying interest directly on payment stablecoins. Corporates and treasurers have placed funds in yield-bearing tokenized instruments while maintaining stablecoins for transactional needs.

Issuers continue to earn interest on reserves that back stablecoins. Network operators, processors and financial platforms track transaction frequency and settlement throughput as measures of activity on-chain. June’s figures show higher turnover coinciding with a smaller outstanding supply of stablecoins.