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Fed's First Cut in 9 Months Slashes $500M from Stablecoin Revenue

The Federal Reserve's 25 basis point rate cut will slash $500M in annualized revenue from top stablecoin issuers

By CoinDesk Data
Updated Sep 30, 2025, 4:51 p.m. Published Sep 24, 2025, 12:37 p.m.
Stablecoins Report September 2025

What to know:

September saw another month of all-time highs for the stablecoin sector, with total market capitalization climbing 3.44% to $293 billion - extending its growth streak to twenty-four consecutive months. Despite broader crypto market headwinds and seasonal trading slowdowns, stablecoins maintained their steady upward trajectory.

  • Stablecoin Market Achieves 24th Consecutive Month of Growth: Total market capitalization reached $293B, representing 3.44% monthly growth, marking two full years of uninterrupted expansion.
  • USDT Extends Growth Streak: Tether's market capitalization grew 2.46% to $172B, marking 25 consecutive months of growth, though market share declined to 58.8% from 59.4% in August as competitors gain traction.
  • Rate Cuts Create $500M Revenue Headwind: The Federal Reserve's 25 basis point rate cut will reduce annualized revenue by up to $500M across the top 5 fiat-backed stablecoins, with USDT potentially facing the largest impact at $325M, followed by USDC at $160M.

Fed Rate Cuts Impact Stablecoin Revenues

The Federal Reserve's September 17th decision to cut interest rates by 25 basis points to the 4.00%-4.25% range delivered a blow to stablecoin issuer revenues. Analyzing collateral holdings of the top five fiat-backed stablecoins, the rate reduction will slash annualized revenue by approximately $500 million combined, with Tether seeing potentially $325 million in lost revenue.

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Analysis assumes Cash & Bank Deposits earn interest.

Circle's USDC faces the second-largest potential impact at $160 million, while smaller players USD1, FDUSD, and PYUSD could lose up to $5.53 million, $2.92 million, and $2.53 million respectively. The cuts highlight stablecoin issuers' sensitivity to monetary policy, as most hold significant portions of reserves in rate-sensitive Treasury bills and money market instruments.

USDe and USDC Reach New Heights

Ethena Labs' synthetic dollar USDe continued its rise, surging 14.0% to $14.1 billion in market capitalization. The growth was bolstered by a September 9th partnership with Binance that integrates USDe across spot trading, Binance Earn rewards programs, and futures collateral support.

Meanwhile, Circle's USDC climbed 3.27% to $67.1 billion, also reaching a new all-time high as institutional adoption continues expanding across traditional finance and DeFi applications.

Trading Patterns Follow Historical Trends

Stablecoin trading volumes on centralized exchanges reached $1.25 trillion as of September 22nd, tracking lower than August in line with consistent three-year seasonal patterns where September typically sees reduced activity. USDT maintained its trading dominance at 73.7% of total volume, followed by USDC at 16.3% and FDUSD at 8.86%.

Gold Stablecoins Surge

Gold-pegged stablecoins emerged as standout performers, with the sector's market capitalization jumping 11.1% to $2.04 billion as gold reached a new all-time high of $3,800. Paxos' PAXG dominated with a 54.0% market share and $1.10 billion market cap, while Tether's XAUT held 43.7% at $890 million.

Data current as of September 22, 2025, sourced from CoinDesk Data and DeFiLlama.