Stablecoin Market Adds $5B: Surge Led By USDS and USDe

Over the past week, nearly $5 billion in new liquidity has flowed into the stablecoin ecosystem, led by supply spikes in Sky’s USDS and Ethena’s USDe. As the market adjusts to a new phase of federal oversight, competition among dollar-pegged tokens appears to be entering a critical phase.

Upstart stablecoins make big moves

According to data from DeFiLlama, the total stablecoin market cap now sits at $264.99 billion, with USDT continuing to dominate at over $163.9 billion, accounting for more than 61% of the total share. But beneath the surface of that dominance, a power shift may be brewing.

USDS and USDe have been the breakout stories of the week. Sky’s USDS added nearly $990 million in new supply, a 24.95% weekly increase, bringing its total market cap close to $5 billion. Meanwhile, USDe, issued by Ethena, jumped 24.63%, minting 1.43 billion new tokens to reach a valuation of $7.21 billion.

That kind of weekly expansion is rare for stablecoins, especially ones outside the traditional top three. In fact, among the top ten largest stablecoins by market cap, most saw supply declines. The contrast highlights growing fragmentation within the space and a potential shift in user demand.

Even PayPal’s PYUSD saw modest growth, rising 2.98% after issuing 25.75 million new tokens. Its total market cap now hovers around $891 million, keeping it in the top ten but far from challenging the leaders, yet.

Regulation adds fuel

The timing of this surge is no coincidence. It follows the passage of the GENIUS Act, a sweeping U.S. law that finally provides a clear regulatory framework for fiat-backed stablecoins. The new clarity has emboldened institutions, opened doors for new issuers, and triggered an uptick in minting activity across the board.

Whether the law will reinforce the dominance of established players like USDT and USDC, or instead open the way for a new class of compliant, innovative challengers remains to be seen. But one thing is certain: the market is no longer stagnant.

Market enters new phase

With billions in new tokens entering circulation and a regulatory green light for further expansion, the stablecoin economy appears to be shifting from consolidation to fragmentation.

Will the market continue to lean on trusted names, or is it ready for a new generation of algorithmically optimized, yield-bearing, or institutionally issued stablecoins? The next few months could define the long-term winners of crypto’s most quietly powerful sector.