Stablecoin startups have attracted funding of $537 million so far, up from $84 million in 2024. Some analysts have attributed the growth to a favourable regulatory framework and new startups from the fintech and banking sectors.
Hong Kong-based OSL Group led in the latest round of funding after securing $300 million in July through equity financing. Circle and Figure cumulatively drive the total funds raised in the sector this year above $2.4 billion. Other notable startups included Rain, Agora Finance, and RD Technologies, with $58 million, $50 million, and $40 million raised in July and August.
Stablecoin funding surges past $2.4B as OSL Group leads the growth
According to Defi Llama data, Stablecoins’ total market cap so far stands at $291.826 billion, a positive 4% change over the past seven days, with USDT leading in dominance with 58% market share. Circle’s USDC follows closely with a market cap of $73.981b, dominating approximately 25% of the market. Ethena USDe and DAI have maintained the third and fourth positions, respectively, reflecting a heightened competition in the sector.
With stablecoin supply now over $290 billion, Coinbase analysts have forecasted that the supply will surpass $1 trillion by 2028. Anna Strebl, CEO of Confirmo, a stablecoin payments platform, commented that there’s just a buzz around stablecoins, noting that access to capital has become easier. She added that the trend is not unfair hype.
Some analysts have also attributed the growth to favourable regulatory frameworks in the U.S. following the passage of key legislative changes. President Donald Trump has been pro-crypto and digital assets since he took office and has signed several bills into law that have helped streamline the digital asset ecosystem in the country. In July, he signed the GENIUS Act into law, a bill described by industry leaders as a turning point for legitimacy.
Cryptopolitan covered the story, noting Trump’s remarks that the GENIUS Act could be perhaps the greatest revolution in financial technology.
“This could be perhaps the greatest revolution in financial technology since the birth of the internet itself. A lot of people are saying that. What do you guys think? If you say yes, I’m saying yes.”
–Donald Trump, the American President
Ron Tarter, CEO of MNEE, said that it was basically a green light for corporate America.
Stablecoin expansion faces pushback, especially from banks
DefiLlama classifies Circle as a centralized finance firm and Figure as an honest world asset company. However, both are issuers of stablecoins and were classified among major capital raisers this year. Circle secured $1 billion through its IPO offering in June. Circle’s stock price is currently trading at $139.92, down by 0.02%.
Startups and new entrants from fintech and banking sectors, such as Stripe, have also posed a challenge for established issuers like Circle and Tether. Stripe disclosed that it’s pursuing a stablecoin network technology called Tempo with Paradigm. Cryptopolitan reported last month that Tempo will improve the current challenges in global payments, including delays and higher fees associated with traditional banking systems. Tempo, a blockchain network enabling instant, low-cost cross-border payments, will operate as open-source and be integrated with TradFi and DeFi ecosystems.
Reuters revealed that Société Générale hinted in June that it would introduce its own dollar-pegged stablecoin while JPMorgan introduced the JMPD. U.S. banks such as Bank of America, Wells Fargo, and Citigroup hinted they are pursuing similar projects.
Evgeny Yurtaev, co-founder and CEO of Zerion, revealed that stablecoins are the building blocks of digital finance, adding that they turn dollars from passive storage into assets that both earn and settle value.
The expansion in the Stablecoin market has also met obstacles and pushbacks, especially from the banking sector. Banking lobby groups have signed petitions against the GENIUS Act, signed into law in July, citing unfair advantage and a potential loss of $6 trillion in deposits from lenders. The argument noted that while banks may issue stablecoins, they are prohibited from paying interest to holders, unlike crypto firms.