Stablecoins Present Vast Potential for Growth According to WisdomTree
In 2025, the stablecoin market has experienced significant growth, expanding beyond its traditional crypto trading and DeFi roles, and becoming integrated into mainstream financial infrastructure. This transformation is evident in the increased adoption of stablecoins for cross-border payments, remittances, global treasury and cash management, and capital market settlements.
This shift is due to stablecoins' ability to enable fast, cost-effective, and transparent payments that operate beyond banking hours and borders, improving financial inclusion and challenging legacy payment systems. As of mid-2025, the aggregate stablecoin supply grew from $204 billion to $252 billion, with monthly settlement volumes increasing 43% to $1.39 trillion.
However, this growth exposes stablecoins to new operational risks, including de-pegging events, code bugs, and vulnerabilities on centralized platforms. The market shows widening disparities in security and regulatory compliance between issuers. To address these concerns, tools like CertiK’s Skynet Stablecoin framework assess security and risk metrics to help identify compliant, secure stablecoins versus riskier counterparts.
The passage of the GENIUS Act in the US in summer 2025 is expected to open the market to new stablecoin issuers, including banks, fintechs, retailers, and tech giants. This could transform competition and regulatory oversight, particularly involving the US Treasury. The Act mandates full 1:1 backing in cash, short-term Treasuries, government money market funds, or similar investments for stablecoins. It also prohibits stablecoin issuers from paying interest and limits issuance to federally regulated banks, some registered nonbanks, and state-chartered firms.
The GENIUS Act establishes a tiered oversight model, prioritizing systemic issuers and bankruptcy protections for stablecoin holders. This increased regulatory scrutiny is aimed at separating compliant stablecoins from non-compliant ones and reducing systemic risks. However, it also challenges the Treasury to keep pace with the growing complexity and innovation in tokenized cash.
The impact of the GENIUS Act is anticipated to be significant, with financial institutions needing to adapt systems and frameworks to leverage stablecoins fully. The shift toward retaining funds in stablecoins versus local fiat could disrupt deposit funding and revenue models in traditional banking. While new entrants empowered by the GENIUS Act may not significantly impact the market in 2025, a notable shift is anticipated in 2026 and beyond.
One example of a company capitalizing on this shift is WisdomTree, which has issued two stablecoins: USDW for transactions and WTGXX, a tokenized U.S. government money market fund for yield. WTGXX has grown from $12 million to $486 million as of 18 July 2025, and has been adopted as a reserve asset for stablecoin issuers. As a regulated fund, WisdomTree has to identify WTGXX holders and allows for peer-to-peer WTGXX transfers onchain 24/7. WisdomTree is also working on the ability to trade WTGXX in real-time 24/7/365 against stablecoins.
The GENIUS Act is expected to reinforce dollar dominance by enabling a tokenized U.S. dollar-based ecosystem for international payments, according to the BlackRock Investment Institute. However, the impact on yields from stablecoin demand for bills is likely to be limited, according to the same institute. The Citi Institute has predicted that stablecoin issuers could become one of the largest holders of US Treasuries relative to any other jurisdiction today.
In conclusion, the stablecoin market is maturing fast with extended use cases beyond crypto trading, becoming embedded in global payments and financial infrastructure. The GENIUS Act marks a regulatory turning point fostering broader issuer diversity and tighter oversight, especially from the US Treasury, with broad implications for financial market structures and innovation. This analysis draws from recent industry reports and market data from Q1 and H1 2025.
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