Understand why and how stablecoins quietly became crypto’s foundation.

Memecoins have been around for a while, and they made lots of headlines in 2025. While many retail traders focused on these meme-powered tokens, stablecoins became the true backbone of crypto.

The total market capitalization of stablecoins moved from just $28 billion in 2020 to over $307 billion as of November 2025. They now appeal strongly to traders, institutions, and governments.

Stablecoins don’t need hype. They are highly regarded for their stability, liquidity, and usage in global transactions.

If you’ve been ignoring stablecoins, this is the time to pay attention. Here, we’ll break down the key information every crypto trader must understand about this asset class.

Stablecoins Aren’t New, but Their Roles Are Evolving

Popular stablecoins, such as USDT, USDC, and BUSD, have existed for years. Adoption and utility, however, grew significantly in 2025.

According to Coingecko data, daily transaction volume of USDT and USDC reached over $1 trillion cumulatively in Q3 of 2025. Clearly, these assets are no longer ‘just a bridge’ but a flourishing sector, representing 14% of total crypto market capitalization.

Stablecoins are now the leading assets for remittances, cross-border trading, and merchant payouts. This is primarily because they bypass traditional banking friction.

While the spotlight remains on volatile digital assets, stablecoins are now the plumbing that makes crypto work.

Why traders must care

Stablecoins offer key benefits to both retail and institutional crypto traders, including safety and opportunities. Below are reasons to care about them:

· Liquidity Provider: Stablecoins enable traders to keep funds securely during periods of volatility and enter into trending assets quickly when needed.

· Yield Generation: Stablecoins can earn predictable returns even in a volatile market. Some DeFi platforms offer between 3–12% APR for lending USDT/USDC, among other stablecoins.

· Cross-Border Flexibility: Stablecoins are steadily becoming the major tool for global payments, dominating in areas with limited access to banks.

Contrary to what some people think, stablecoins are not boring. They are strategic, functional, and profitable.

The Numbers Behind the Quiet Rise

To fully grasp the key roles stablecoins now play in the crypto space, here are the numbers behind their sudden rise in 2025:

· USDT and USDC reached a circulating supply of $90 billion and $60 billion respectively. Per Coingecko

· Top DeFi protocols, such as Aave, Compound, and Curve, now hold $40 billion in stablecoin deposits, providing the necessary liquidity to power trading and lending activities

· Stablecoins now account for over 50% of total DeFi collateral, up from 35% in 2023, cementing their position as the backbone of decentralized finance.

These numbers clearly show that while regular traders are mostly chasing high-risk altcoins, stablecoins quietly underpin the entire market.

Risks and Considerations

Due to their inherent stability, stablecoins may feel safe. However, they are not risk-free. Here, we’ll briefly discuss potential risks and considerations:

· Counterparty risk: Unlike other asset classes, most stablecoins are centrally issued. This means a failure in reserves or governance can lead to price instability.

· DeFi exposure: Many of the protocols holding stablecoins are prone to smart contract and liquidity risks, and a hack could impact the liquidity and stability of an asset.

· Regulatory scrutiny: Governments are getting more and more involved in crypto, focusing mostly on issuance and backing of stablecoins. USDT and USDC, among other stablecoins, face audits and potential reserve requirements.

Being familiar with these risks will help traders use stablecoins strategically rather than blindly.

Why the Future Depends on Stablecoins

If you understand their evolving role in the crypto space, you will know that stablecoins are no longer used for short-term convenience alone. Here are a few reasons why they will remain relevant:

· Infrastructure for payments: Stablecoins currently offer the best payment infrastructure, both on-chain and off-chain.

· Medium for DeFi expansion: Stablecoins are instrumental in DeFi growth and expansion; they power lending, yield farming, and automated trading across markets.

· Bridge for global adoption: Stablecoins promote global adoption of cryptocurrency, especially in regions with unstable local currencies. This is specifically true for Nigeria, where I come from.

As the crypto market continues to evolve, traders who understand stablecoins are better equipped to handle risks and control timing and liquidity.

As the next hype cycle beckons, knowledge of stablecoins will distinguish experienced traders from newbies.

Final Thoughts

In 2025, many crypto traders chased memecoins and other volatile assets that promised explosive returns. In the same period, stablecoins quietly built the foundation of the crypto economy. Their relevance will only grow in 2026 and beyond.

If you are in the crypto space for good, chasing the loudest coins is hardly the right approach. You must understand the assets that make trading possible, and stablecoins are strategic. For data-driven, trend-focused crypto insights, follow me here on Medium.

About the Author

Michael Kalu is a Nigerian writer, content strategist, and Web3 Storyteller. He’s been in crypto since 2020 and has been involved in various projects, including his latest experiments, Crypto-Crazy Football Fans, and the Ekuke memecoins. His short story collection, The Book of Ekuke: Breakthrough and Other Stories, is based on these new projects. You can follow him on LinkedIn and X.

While Everyone Chased Memecoins, Stablecoins Became Crypto’s Real Backbone was originally published in Coinmonks on Medium, where people are continuing the conversation by highlighting and responding to this story.