A new a16z report finds that stablecoins now account for over 1% of US dollars in circulation as institutions and fintechs get involved.
The cryptocurrency market in 2025 is increasingly being shaped by institutional adoption and the rise of stablecoins, underscoring rapid advances in blockchain technology capable of supporting broader mainstream use, according to venture capital firm Andreessen Horowitz (a16z).
In its latest State of Crypto report, a16z highlighted the growing involvement of traditional financial giants such as BlackRock, Visa, Fidelity and JPMorgan Chase, alongside fintech companies like Stripe, PayPal and Robinhood, all of which are expanding their presence in the digital asset space.
Part of this growth is being driven by improvements in underlying blockchain infrastructure, with some networks now processing over 3,400 transactions per second, a more than 100-fold increase in throughput over the past five years.
This technological progress has fueled the continued adoption of stablecoins, fiat-pegged digital tokens that can move across the internet without relying on traditional payment rails. The report cited $9 trillion in stablecoin transactions over the past 12 months — an 87% increase from the previous year.
On an unadjusted basis, stablecoin transactions were valued at $46 trillion over the same period.
Related: Crypto Biz: Wall Street giants bet on stablecoins
“In years past, stablecoins were used mostly to settle speculative crypto trades; as of the last couple years, they have become the fastest, cheapest, and most global way to send a dollar,” the report said.
Regulatory developments are also helping to drive adoption. In the United States, the recently passed GENIUS Act establishes clearer oversight and reserve requirements for issuers, aiming to ensure transparency and consumer protection. In the United Kingdom, where legislation has progressed more slowly, regulators are working toward introducing a stablecoin framework by the end of next year.
Beyond stablecoins, a16z noted growing institutional participation across the crypto sector, citing the rise of spot exchange-traded funds (ETFs) and initiatives from major institutions, including Citigroup, Fidelity, JPMorgan and Morgan Stanley, to offer or expand crypto-related services.
Related: BlackRock sees record quarter for iShares ETFs as Bitcoin, Ether demand surges
One of the key takeaways from the State of Crypto report is that stablecoins are becoming what a16z calls a “global macroeconomic force.” The report notes that more than 1% of all US dollars now exist as stablecoins on public blockchains.
According to a16z, stablecoins collectively hold more than $150 billion in US Treasurys, making them the 17th-largest holder of US government debt, ahead of many sovereign nations.
A significant share of that exposure comes from Tether, the market leader, which holds roughly $127 billion worth of Treasury bills.
Overall, the stablecoin market has expanded to about $316 billion, according to data from CoinMarketCap. In addition to Tether’s USDt (USDT) and Circle’s USDC, both fully collateralized stablecoins, Ethena’s synthetic dollar, USDe, has been gaining traction, with a circulating supply of about $11 billion.
