Institutional compliance costs and higher Treasury yields are reshaping stablecoin issuance as growth shifts from rapid expansion to balance-sheet discipline.
After a period of rapid expansion, the global stablecoin market has largely stalled, signaling a consolidation phase as new regulation, liquidity constraints and higher real-world yields weigh on new issuance, according to Jimmy Xue, co-founder of quantitative yield protocol Axis.
In a note shared with Cointelegraph, Xue said that while stablecoin regulation has advanced, tighter frameworks in the United States and Europe have forced institutional issuers to hold higher-quality reserves and absorb rising compliance costs, slowing the pace of net issuance.
At the same time, elevated real yields on US Treasurys have increased the opportunity cost of holding stablecoins that offer no direct yield. That dynamic has dampened speculative minting and reinforced stablecoins’ role as infrastructure for payments, settlement and short-duration liquidity, rather than high-growth instruments.
