CertiK Stablecoin Report Reveals Major Market Shifts as Regulatory Frameworks Reshape Digital Currency Landscape

The stablecoin ecosystem experienced unprecedented growth and transformation in the first half of 2025, with market capitalization surging from $204 billion to $252 billion while facing new regulatory challenges that are fundamentally reshaping the competitive landscape. CertiK's comprehensive Skynet Stablecoin Spotlight Report for H1 2025 provides critical insights into how security risks, regulatory compliance, and institutional adoption are driving a new era of digital currency maturation.

Market Expansion Amid Growing Scrutiny

The stablecoin sector's remarkable expansion in early 2025 reflects its cementing role as vital financial infrastructure. Monthly settlement volumes increased by 43% to reach $1.39 trillion, while the total number of stablecoin-holding addresses had already surpassed 120 million by Q3 2024. This growth trajectory positions stablecoins as representing approximately 8.9% of the overall cryptocurrency market as of July 2025.

However, this rapid adoption has brought intensified scrutiny regarding security protocols, risk management, and regulatory compliance. The dual nature of this growth - expanding mainstream acceptance alongside widening security disparities - has created what CertiK describes as a "central tension" in the maturing stablecoin market.

CertiK's Comprehensive Rating Framework

To address these evolving challenges, CertiK developed the Skynet Stablecoin Rating Framework, a specialized evaluation system that combines qualitative analysis with quantitative metrics across six critical domains:

• Operational Resilience assesses the ability to maintain price pegs under market stress, evaluating reserve quality, custody arrangements, stabilization mechanisms, and historical peg deviation patterns.
• Governance Strength analyzes decision-making frameworks, with centralized issuers evaluated on regulatory licensing and audit frequency, while decentralized protocols are assessed on voting integrity and anti-exploit mechanisms.
• Fundamental Health measures foundational risks, including custodian concentration and the jurisdictional integrity of the issuer's operational base.
• Code Security quantifies technical risks through analysis of third-party audits, bug bounty programs, and formal verification processes.
• Market Dynamic gauges market activity, liquidity depth, and ecosystem integration to identify market-related vulnerabilities.
• Community Trust assesses public sentiment and team transparency as indicators of user confidence and resilience against potential bank-run scenarios.

Top-Tier Stablecoin Rankings

The Skynet leaderboard reveals distinct performance tiers among leading stablecoins, with USDT (Tether) maintaining its dominant position with a AAA rating and score of 94.72. Despite facing new compliance challenges, particularly with Binance's delisting of non-MiCA compliant stablecoins for European customers, USDT's circulation expanded from approximately $138 billion to $154 billion by June 2025.

USDC (Circle) achieved remarkable growth, with its supply surging from around $41 billion to over $61 billion, earning a AAA rating of 93.34. Circle's strategic positioning included securing a MiCA license for the European Economic Area and completing a successful IPO with shares soaring 235% on debut. This regulatory compliance strategy positioned USDC as the preferred stablecoin for European markets while facilitating institutional integration with Visa and Stripe, piloting cross-border settlements.

PYUSD (PayPal USD) demonstrated exceptional momentum by doubling its market capitalization in H1 2025, achieving an AA rating of 91.47. Key developments included integration on the Solana blockchain for faster, cheaper payments and the introduction of a rewards program offering 3.7% APY on holdings, significantly incentivizing adoption within PayPal's vast user base.

Security Landscape: Operational Risks Eclipse Code Vulnerabilities

The first half of 2025 marked the costliest period for digital asset security on record, with 344 incidents resulting in $2.47 billion in industry-wide losses. Critically, the nature of these incidents revealed a strategic shift in the threat landscape, with operational lapses rather than smart contract vulnerabilities driving the majority of losses.

The $1.5 billion Bybit hack in February, attributed to private key compromise rather than smart contract exploitation, exemplified this shift toward targeting the operational infrastructure of centralized platforms. This trend exposes significant counterparty risk for stablecoin holders and highlights the critical importance of robust operational security measures.

The stablecoin sector itself demonstrated resilience during direct challenges. When First Digital USD (FDUSD) briefly dropped to $0.76 in March following rumors about reserve quality, the issuer's rapid disclosure of audited holdings and immediate secondary-market support restored the peg to above $0.995 within twelve hours, illustrating both the vulnerability to confidence shocks and the stabilizing power of transparent, liquid reserves.

Regulatory Transformation: Bifurcating the Market

The regulatory landscape underwent a fundamental transformation in H1 2025, moving from theoretical discussions to practical implementation across major jurisdictions. In the United States, two significant pieces of legislation were advanced through Congress, establishing comprehensive federal oversight regimes.

The Stablecoin Transparency and Accountability for a Better Ledger Economy (STABLE) Act of 2025 proposes requiring issuers to maintain 1:1 reserves in high-quality liquid assets, publish monthly audited reserve reports, and prohibit rehypothecation of reserve assets. The legislation includes a two-year moratorium on "endogenously collateralized" stablecoins, directly addressing past algorithmic failures.

Concurrently, the Senate's Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act of 2025 establishes a tiered regulatory system, allowing smaller issuers under $10 billion in circulation to operate under state-level oversight while mandating federal supervision for larger entities. The bill's passage in June contributed to the stablecoin market cap surging to a record $251.7 billion.

The European Union's enforcement of MiCA regulations created immediate market consequences. Binance's March 3, 2025, announcement to delist several prominent stablecoins, including USDT and DAI, for European customers demonstrated how regulatory compliance is becoming a competitive differentiator, favoring proactive compliance seekers over reactive adapters.

Institutional Adoption Accelerates

Traditional financial institutions and major corporations significantly accelerated stablecoin adoption throughout H1 2025. Société Générale became the first major bank to launch a USD stablecoin with "CoinVertible USD," issued on Ethereum and Solana under the EU MiCA framework compliance. Spain's Santander and Bank of America are reportedly advancing their own stablecoin projects, pending regulatory approvals.

Corporate integration expanded beyond traditional finance. PayPal's partnership with Paxos continued expanding PYUSD's ecosystem, while retail giants including Amazon, Walmart, and Expedia were rumored to be exploring branded stablecoin initiatives. Payment networks Visa and Stripe began piloting cross-border settlement using USDC, and BlackRock furthered its indirect stablecoin exposure through Circle investments.

Network Preferences and On-Chain Activity

User behavior demonstrated clear preferences for cost-efficient blockchain networks. Tron-based USDT experienced exceptional growth, with circulation jumping approximately $20 billion to account for more than half of the total USDT supply by June. Tron now processes over 8.9 million daily stablecoin transactions, representing about 28% of global stablecoin active addresses.

Solana established itself as the busiest stablecoin network, overtaking Ethereum in monthly stablecoin transactions since 2024, while maintaining its position as the second-largest host for USDC with 13% of supply. These network preferences reflect users' prioritization of transaction costs and speed over traditional network effects.

Emerging Innovation: Yield-Bearing and RWA-Backed Models

The second half of 2025 is expected to be characterized by growth in two innovative stablecoin models. Real-world-asset-backed stablecoins, collateralized by off-chain traditional assets like Treasury bills, align with U.S. regulatory direction. The tokenized U.S. Treasuries market surpassed $8 billion in assets under management in early 2025.

Yield-bearing stablecoins, effectively operating as on-chain money market funds, grew to nearly $10 billion by mid-year. These instruments generate returns for holders from underlying collateral strategies, driven by demand for productive, stable assets.

However, these innovative models introduce sophisticated risk vectors requiring diligent management, including counterparty and custody risks from off-chain dependencies, strategic and smart contract risks from yield-generation mechanisms, composability risks from deep DeFi integration, and governance and regulatory risks from centralized control mechanisms.

Market Projections and Strategic Implications

CertiK projects the stablecoin market will exceed $300 billion by year-end, with RWA-backed and yield-bearing models expected to capture 8-10% of total market share. This growth will likely drive capital migration from non-productive stablecoins toward yield-generating alternatives, creating further market segmentation between regulated, low-risk institutional coins and higher-yield, decentralized alternatives for DeFi-native users.

The regulatory push carries distinct geopolitical implications, with U.S. policymakers fostering USD-backed stablecoins as a strategy to reinforce dollar dominance in the digital age. Stablecoin issuers have already become among the top 20 largest holders of U.S. Treasuries, surpassing sovereign nations like Germany.

Looking Forward: Critical Success Factors

The stablecoin sector's maturation is being shaped by institutional-led growth and escalating security risks. The shift in threat landscape toward operational vulnerabilities at centralized entities, combined with market confidence in reserve assets remaining paramount for peg stability, creates new imperatives for stablecoin issuers.

The comprehensive regulation advancing in the U.S. and EU is accelerating market bifurcation between compliant and non-compliant issuers. High compliance costs - Circle reportedly spends over $50 million annually on audits and transparency measures - create significant barriers to entry, inherently favoring large, well-capitalized, centralized issuers while disadvantaging smaller, innovative, or decentralized projects.

In this evolving environment, rigorous risk management, transparent operations, and proactive compliance posture have emerged as critical determinants of long-term viability. The future stablecoin market will be defined by issuers who successfully navigate these multifaceted challenges while earning both institutional and retail trust in an increasingly sophisticated and regulated digital currency ecosystem.

The CertiK report underscores that while stablecoins have achieved mainstream status, the widening risk disparities and regulatory requirements are fundamentally reshaping competitive dynamics, creating both unprecedented opportunities for compliant leaders and significant challenges for the broader ecosystem.