Stablecoins are a growing force in digital finance, offering price stability, global access and use … More
Over the past twelve months, stablecoins have quietly taken a central role within digital assets, powering everything from trading platforms to cross-border payments. Their popularity is rapidly growing, with daily trading volumes exceeding $135 billion. Designed to maintain a consistent value, these digital assets offer stability in an otherwise volatile crypto market. Understanding how stablecoins function and their practical applications is vital for anyone engaging with digital assets, regardless of experience level.
This guide examines the five largest stablecoins by market capitalization, highlighting their key features, peg mechanisms and everyday use cases across trading, payments, savings and decentralized finance.
Top 5 Stablecoins By Market Cap
- Tether (USDT)
- USD Coin (USDC)
- Ethena USDe (USDe)
- Dai (DAI)
- World Liberty Financial USD (WLF USD)
1. Tether (USDT)
Market Cap: $155,497,490,891.47
Tether’s USDT is the largest and most widely used stablecoin in the digital asset market, with a market capitalization exceeding $155 billion. Launched in 2014, it was the first stablecoin to peg its value to a fiat currency, aiming to provide price stability in crypto’s volatile environment. Each USDT token is designed to maintain a 1-to-1 value with the U.S. dollar and is backed by reserves held by Cantor Fitzgerald on behalf of Tether.
USDT operates across multiple blockchains, including Ethereum, Tron and Solana, allowing for broad compatibility and high transaction speed. Its large circulating supply and liquidity have made it the most common stablecoin in crypto markets. It is often used to facilitate trading and as a settlement layer on centralized and decentralized exchanges.
Traders, institutions and exchanges frequently turn to USDT for its utility in moving funds quickly while avoiding exposure to market volatility. In addition to trading, it is widely used in remittances, payments and DeFi protocols.
2. USD Coin (USDC)
Market Cap: $61,560,697,675.35
USD Coin, or USDC, is a U.S. dollar-backed stablecoin issued by Circle Internet Group. Since USDC’s launch in 2018 in partnership with Coinbase. The two companies have become more operationally distinct, though they continue collaborating in several areas. Like USDT, USDC is pegged 1-to-1 with the U.S. dollar and is designed to offer price stability and efficient digital transactions.
Circle Internet Group went public on June 5, 2025, with a highly anticipated debut on the New York Stock Exchange. Shares of Circle Internet Group surged 168% on the first day of trading, opening at $69 after pricing at $31 and briefly reaching a high of $103.75. As of June 2025, USDC has a market capitalization of over $61.5 billion, making it the second-largest stablecoin globally. To ensure transparency, Circle publishes monthly proof-of-reserves reports verified by Deloitte, confirming that USDC is fully backed by cash and short-term U.S. Treasuries.
USDC has seen consistent adoption due to its strong regulatory posture and support from licensed financial institutions. It is natively supported on 21 blockchain networks, allowing broad cross-chain functionality. This interoperability enhances its appeal as a settlement and payment layer across centralized and decentralized platforms.
Its primary use cases include instant global payments, on-chain savings, and participation in DeFi. USDC is frequently used in liquidity pools, lending protocols and as collateral in crypto-native financial products. Due to its speed and low cost, businesses and governments have adopted it for payroll, cross-border aid distribution and donation transfers. USDC’s robust infrastructure and regulatory alignment have helped it maintain trust in the stablecoin market.
3. Ethena (USDe) H2
Ethena’s USDe is a variant stablecoin that aims to stay close to the value of one U.S. dollar. Unlike traditional stablecoins backed by cash or government bonds, USDe is backed by several types of crypto and uses a strategy called “delta hedging” to reduce price swings. It has a market cap of over $5 billion, making it one of the market’s fastest-growing hybrid, or “synthetic dollar”, stablecoins.
To mint, or create, USDe, users deposit crypto, such as USDT, automatically triggering the protocol to open a short position on a derivatives exchange. This helps cancel out price changes in the backing asset, keeping USDe stable. The crypto backing USDe stays in a secure, off-exchange wallet to lower the risk of hacks or losses from centralized platforms.
USDe is commonly used in DeFi for payments and savings. Users can stake USDe to receive “sUSDe”, a yield-bearing version that earns rewards. In 2024, sUSDe offered an average return of around 18%, making USDe attractive to those seeking both price stability and passive income.
While USDe offers notable growth potential and distinctive features, it also involves certain risks. It relies on complex trading strategies and centralized exchange infrastructure, and its audits are not fully disclosed to the public. Governance is conducted by committees appointed by ENA tokenholders rather than through direct community voting, which limits participatory decentralization.
4. Dai (DAI)
Founded in 2017, Dai is considered the original decentralized stablecoin. It is issued by MakerDAO, a decentralized autonomous organization built on the Ethereum blockchain. Dai aims to maintain a soft peg to the U.S. dollar without relying on a central authority or traditional banks. Instead of being backed by fiat, it is supported by overcollateralized debt positions using Ethereum and other approved crypto assets. Users generate Dai by locking collateral into smart contracts known as Vaults.
DAI’s supply is dynamically managed through user activity and risk parameters voted on by MakerDAO token holders. These holders help set interest rates, collateral types and key settings. In late 2024, MakerDAO announced a major brand change. The MakerDAO protocol rebranded as Sky, and the DAI stablecoin was rebranded as USDS to reflect its position as a U.S. dollar-denominated asset in the evolving digital economy.
DAI is widely used in DeFi for borrowing, lending and trading. Its price stability makes it a reliable tool for hedging against market volatility, earning yield through DeFi protocols, and facilitating cross-border payments. Traders and developers also use it as a stable unit of account in smart contracts and decentralized applications.
DAI emphasizes transparency and permissionless access because it is crypto-backed and governed by a decentralized community. Its design has helped establish it as a foundational asset in the broader DeFi ecosystem.
5. World Liberty Financial USD (USD1)
World Liberty Financial’s stablecoin, USD1, also called WLF USD, is a stablecoin pegged 1:1 to the U.S. dollar. USD1 launched in April of 2025 under the Trump family’s World Liberty Financial platform. With a current market cap just over $2.1 billion, USD1 positions itself as a fully backed, stable digital dollar “for a new era.” Its reserves consist of short-term U.S. Treasuries, dollar deposits, and other cash equivalents, all custodied and managed by BitGo, a federally registered money services business and trust company.
Much like USDT and USDC, USD1 prioritizes speed, transparency and global accessibility. Transactions settle on-chain and are supported across multiple blockchain networks. USD1 drew significant attention at Token2049 in May of 2025, when Eric Trump announced that USD1 would facilitate MGX, an Abu Dhabi-based investment firm’s $2 billion investment in Binance. While World Liberty Financial and BitGo stated that USD1 is fully backed and subject to monthly audits, reserve reports have not been publicly released.
USD1’s use cases are parallel to those of other stablecoins. They include cross-border payments, business settlements and integration with DeFi applications. Though marketed as apolitical, public disclosures show that entities linked to U.S. President Donald J. Trump and his family hold indirect economic interests in the reserve earnings.
Most Popular Stablecoin Use Cases
Stablecoins are used in many real-world applications, offering speed, cost efficiency and global accessibility. Peer-to-peer payments were among their earliest and most impactful use cases, especially in emerging markets facing currency instability, limited banking infrastructure or high remittance fees. Now, users across the globe rely on stablecoins for everyday transactions. Their low fees and speed make them ideal for both high-value transfers and lightweight, frequent payments.
Businesses use stablecoins for cross-border payments, supplier settlements and treasury management. Stablecoin-linked cards are growing, with usage patterns similar to traditional debit and credit cards. Although thousands of tokens exist, market capitalization data shows that Tether’s USDT and Circle Internet Group’s USDC lead the sector. Others like Ethena’s USDe, MakerDAO’s DAI, and World Liberty Financial’s USD1 each hold less than $6 billion in value. This concentration reflects the small number of issuers’ dominant role in global stablecoin activity.
Using Stablecoins Safely And Effectively
To use stablecoins securely, it’s essential to start with a reliable wallet. Non-custodial wallets give users full control over their private keys, while custodial wallets may be easier for beginners but carry more custodial risk. Users can also opt for hardware wallets to store keys offline and reduce exposure to online threats for added protection.
Stablecoins can be used across payment apps, DeFi protocols and exchanges. Still, not all platforms offer equal safety. Use audited DeFi apps, verified tokens and platforms with strong security. Avoid copycat tokens, phishing sites and unverified protocols. Double-check contract addresses, avoid unknown transactions, and consider splitting funds across wallets. For all stablecoins, trusted infrastructure and basic cybersecurity help protect assets.
Bottom Line
Stablecoins are a growing force in digital finance, offering price stability, global access and use across trading, payments, savings and decentralized apps. The top five by market cap represent models ranging from fiat-backed to hybrid models. While USDT and USDC dominate, newer options like USDe and USD1 are gaining traction through innovative features and business use.
To use stablecoins safely, it is paramount to select reputable wallets, understand the risks associated with different platforms, and remain aware of potential scams or technical vulnerabilities. When used with appropriate caution, stablecoins can be useful for transactions, yield generation and interacting with decentralized protocols.
