Skynet Stablecoin Spotlight Report: H1 2025

Executive Summary

Stablecoin adoption grew significantly in the first half of 2025, cementing its role as vital financial infrastructure. This expansion brought increased scrutiny of security, risk, and regulatory compliance. CertiK’s Skynet rating system has developed a comprehensive framework specifically for assessing stablecoin activity from a security and risk standpoint.

The first half of 2025 highlighted a central tension in the maturing stablecoin market. While institutional adoption accelerated and on-chain activity surged , the nature of risk shifted dramatically. Two major forces are now reshaping the landscape: the escalating threat from operational security failures at centralized platforms and a global wave of regulation that is actively separating compliant issuers from non-compliant ones.

Figure 1 - Skynet Stablecoin Leaderboard

Key Takeaways

Skynet Stablecoin Framework and Ratings

Skynet’s stablecoin-focused rating system provides a nuanced understanding of stability and trustworthiness beyond traditional financial metrics, ultimately generating a quantifiable score reflecting overall security posture and justifying its position.

Rating Category

Figure 2 - Skynet Stablecoin Rating Framework

Skynet Stablecoin Leaderboard: Top Projects and H1 2025 Ratings

The following is an overview of leading stablecoins evaluated by the Skynet Rating Framework, including key developments and security postures for the first half of 2025 (as of July 1, 2025):

Skynet Scores by Issuer

H1 2025 Score Standouts

The first half of 2025 was particularly impactful for the top stablecoins, demonstrating their strategic moves and market influence.

USDT (Tether)

PayPal's stablecoin (PYUSD), issued by Paxos Trust Company, significantly doubled its market cap in H1 2025, demonstrating accelerated adoption within its vast user base. As the regulated issuer behind PYUSD, Paxos provides the core infrastructure and compliance framework behind PYUSD. A key strategic expansion involved its integration on Solana, enabling faster and cheaper payments, and facilitating fee-free purchases and transfers within the Phantom wallet. To further incentivize adoption, PayPal also announced a launch of PYUSD rewards, offering U.S. users a competitive 3.7% APY on their holdings.

RLUSD (Ripple USD)

Ripple USD (RLUSD) carved out its position by prioritizing security and reliability for institutional use cases. A key differentiator for the project is its perfect security record, having maintained zero incidents since its launch. This emphasis on security is supported by continuous audits as its market share grows, underpinning its strategy to deliver enterprise-grade solutions and drive the proliferation of RLUSD.

Stablecoin Security Incidents in H1 2025

Impacting the broader DeFi and CEX ecosystem, H1 2025 was the costliest period for digital asset security on record, with 344 incidents resulting in $2.47 billion in industry-wide losses. The nature of these incidents, though not always impacting stablecoins directly, reveals a critical evolution in the threat landscape.

Security Incidents

• Stablecoin Incidents

The market-driven stress test on First Digital USD (FDUSD) in March ultimately served as a powerful illustration of its resilience. While a rumor-sparked liquidity run occurred, the issuer’s crisis response proved effective. The rapid disclosure of audited holdings and immediate secondary-market support restored the peg to above $0.995 within twelve hours, showcasing the stabilizing power of transparent, liquid reserves against confidence shocks.

• DeFi and CEX Ecosystem

The period was dominated by the $1.5 billion Bybit hack in February. This breach, attributed to a private key compromise rather than a smart contract exploit, highlights a strategic shift by attackers toward the operational infrastructure of centralized platforms, exposing significant counterparty risk for stablecoin holders. Vulnerabilities in the DeFi ecosystem, where stablecoins are a primary asset, were also a major source of loss: the $49.5 million Infini exploit drained stablecoin deposits from a third-party application, and the $225 million Cetus Protocol exploit resulted from a complex hack. These events confirm that risk assessment must extend beyond the stablecoin itself to the entire ecosystem of applications with which it interacts.

Market Growth and On-Chain Activity

In H1 2025, the stablecoin market expanded significantly, marked by increased supply and robust on-chain activity. This period also underscored changing user preferences for stablecoin types and blockchain networks.

Stablecoin Supply and Market Dynamics

Figure 4 - Stablecoin Market Dominance H1 2025

On-Chain Activity and User Adoption

On-chain, both transaction frequency and user counts continued their upward trajectory. Monthly stablecoin transaction volumes climbed from approximately $982 billion in January 2025 to $1.394 trillion by May 2025. Active stablecoin wallet addresses also saw a sharp increase. As of January 2025, over 32 million unique addresses had used stablecoins, more than triple the figure from 2022. The total number of stablecoin-holding addresses had already surpassed 120 million in Q3 2024. USDT remained the most widely held stablecoin, with over 5.8 million addresses, which is about 2.6 times that of USDC.

Shifting Network Preferences

Users increasingly opted for low-cost chains to maximize efficiency. Tron-based USDT experienced exceptional growth in H1 2025, with its circulation jumping by approximately $20 billion. By June, Tron accounted for more than half of the total USDT supply, holding roughly 80 billion USDT. Tron now processes over 8.9 million stablecoin transactions daily, with around $21.5 billion in daily USDT transfers and over 1 million daily active wallets, representing about 28% of global stablecoin active addresses.

In contrast, Ethereum remains the primary chain for USDC, hosting 62% of its supply, with Solana coming in second at 13%. Notably, Solana has overtaken Ethereum in monthly stablecoin transactions since 2024, establishing itself as the busiest stablecoin network. Overall, the first half of 2025 demonstrated robust on-chain stablecoin activity, characterized by rising volumes, an expanding user base, and growing confidence in stablecoins across various networks.

Stablecoin Illicit Activity

The first half of 2025 highlighted the dual nature of stablecoins as they became the primary tool for laundering the proceeds of major hacks. Attackers consistently convert stolen assets to stablecoins, with USDT on the TRON network emerging as the preferred vehicle due to its low fees and deep liquidity. This concentration of illicit activity creates significant compliance risks, heavily influencing governance scores within the Skynet framework. While the relative share of illicit transactions is shrinking, thanks to improved blockchain analytics, the absolute value remains in the tens of billions. Increased regulatory action, highlighted by the March 2025 takedown of the Garantex exchange, signals a growing focus on dismantling the infrastructure that facilitates these illicit flows.

Institutional Adoption

The first half of 2025 saw accelerated adoption of stablecoins by traditional financial institutions and large corporations, marking USD stablecoins’ integration into mainstream finance. In June, Société Générale issued “CoinVertible USD,” becoming the first major bank to launch a USD stablecoin. Issued on Ethereum and Solana and regulated as an e-money token under the EU’s MiCA framework, it demonstrates banks’ ability to enter the stablecoin market under compliance—while unlicensed issuers like Tether face restrictions in the EU. Spain’s Santander is reportedly exploring a fiat-pegged stablecoin (USD and EUR), and Bank of America is reportedly advancing its own stablecoin project, pending regulatory approval.

On the corporate side, PayPal, in partnership with Paxos, continued to expand PYUSD’s ecosystem: in May, PayPal integrated PYUSD on Solana for faster, cheaper payments and enabled fee-free purchases and transfers in the Phantom wallet. PayPal also announced a summer launch of PYUSD holding rewards, offering U.S. users 3.7% APY on holdings. USDC issuer Circle went public with its IPO, with shares soaring 235% on debut. Meanwhile, retail and tech giants like Amazon, Walmart, and Expedia were rumored to be exploring branded stablecoins. Payment networks Visa and Stripe began piloting cross-border settlement with USDC, and asset manager BlackRock furthered its indirect stablecoin exposure through Circle investments. These moves show stablecoins moving beyond crypto into broader financial and commercial applications.

Figure 5 - Stablecoin Total Market Cap H1 2025

Regulatory Impact on Stablecoin Adoption and Security

The first half of 2025 marked a pivotal period for global stablecoin regulation. Major jurisdictions moved from theoretical discussions to practical implementation and legislative action, fundamentally reshaping the stablecoin industry's security practices, market structure, and competitive dynamics.

U.S. Advances Federal Oversight

In the United States, two significant bills progressed through Congress, aiming to establish a comprehensive federal oversight regime. The Stablecoin Transparency and Accountability for a Better Ledger Economy (STABLE) Act of 2025, introduced in the House, proposes a robust federal framework requiring issuers to maintain 1:1 reserves in high-quality liquid assets (like U.S. currency or short-term Treasury bills), publish monthly audited reserve reports, and prohibit the rehypothecation of reserve assets. It also imposes a two-year moratorium on new "endogenously collateralized" stablecoins (a direct response to past algorithmic failures) and explicitly clarifies that payment stablecoins issued under its framework are not securities, offering significant regulatory relief.

Concurrently, the Senate passed the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act of 2025. This bill proposes a tiered regulatory system, allowing smaller issuers (under $10 billion in circulation) to operate under state-level oversight while mandating federal supervision for larger entities. Like the STABLE Act, it bans algorithmic stablecoins and mandates strict reserve requirements. A key provision of the GENIUS Act is its explicit permission for banks to issue stablecoins, aiming to integrate the sector into traditional finance. The bill's passage in June was a major catalyst, contributing to the stablecoin market cap surging to a record $251.7 billion.

European Union Enforces MiCA Regulations

While the U.S. progressed with its framework, the European Union began enforcing its own. The stablecoin-specific provisions (Titles III and IV) of the Markets in Crypto-Assets (MiCA) regulation became fully applicable on June 30, 2024, making H1 2025 the first full period of their impact. The consequences were immediate. On March 3, 2025, Binance, the world's largest exchange, announced it would delist several prominent stablecoins, including USDT and DAI, in order for its European customers to comply with MiCA's stringent requirements. This action bifurcated the market, favoring issuers who had proactively sought compliance. For instance, Circle secured a MiCA license, positioning USDC as a preferred stablecoin for the entire European Economic Area and enhancing its appeal to institutional clients who prioritize regulatory certainty.

Regulatory Compliance Reshapes the Landscape

These regulatory developments are not merely creating compliance burdens; they are fundamentally reshaping the competitive landscape. The high costs associated with meeting these new standards—Circle reportedly spends over $50 million annually on audits and transparency measures—create significant barriers to entry. This dynamic inherently favors large, well-capitalized, and centralized issuers who can afford the legal and operational overhead. Conversely, it disadvantages smaller, more innovative, or decentralized projects that may struggle to meet bank-like requirements. In essence, regulation is acting as a powerful sorting mechanism, rewarding proactive compliance with institutional trust and market share, while penalizing non-compliance with exclusion from major markets.

Geopolitical Implications and U.S. Dollar Dominance

This regulatory push also has a distinct geopolitical dimension. The U.S. administration's vocal support for stablecoins, including a presidential executive order promoting them as essential financial infrastructure, extends beyond consumer protection. It reflects a broader strategy to reinforce the U.S. dollar's global dominance in the digital age. By creating a regulated on-ramp for USD-backed stablecoins, U.S. policymakers are fostering a new, global class of buyers for U.S. government debt. Stablecoin issuers have already become one of the top 20 largest holders of U.S. Treasuries, surpassing sovereign nations like Germany. The STABLE and GENIUS Acts are designed to formalize and expand this dynamic, ensuring that the growth of the digital dollar ecosystem directly benefits the U.S. fiscal position.

Outlook for H2 2025: The Next Wave of Stablecoin Innovation

Emergence of Yield-Bearing and RWA-Backed Models

H2 2025 is expected to be characterized by the growth of two related stablecoin models:

• RWA-Backed Stablecoins: Collateralized by off-chain traditional assets like Treasury bills, this model aligns with the direction of U.S. regulation. The market for tokenized U.S. Treasuries surpassed $8 billion in AUM in early 2025.
• Yield-Bearing Stablecoins: Functioning like on-chain money market funds, these instruments provide returns to holders from collateral-based strategies. This market segment, driven by the demand for stable, income-producing assets, reached nearly $10 billion by mid-year. However, regulatory challenges are on the horizon. In the U.S., the proposed GENIUS Act would ban stablecoins from paying interest, potentially slowing the growth of these models and forcing issuers to find workarounds. Notably, the act does not forbid third-party platforms (like some CeFi or DeFi protocols) from providing returns to users; it only restricts issuers from paying interest themselves.

Potential Security and Risk Factors

These innovative models introduce new risk vectors requiring diligent management:

• Counterparty and Custody Risk: Reliance on off-chain custodians introduces dependencies on traditional financial entities, whose potential failure or legal encumbrance presents a direct risk to the stablecoin.
• Strategic and Smart Contract Risk: Yield-generation mechanisms expose holders to the risks of flawed investment strategies, borrower defaults, or smart contract bugs, any of which could impair the stablecoin's backing.
• Composability Risk: The deep integration of a yield-bearing stablecoin into DeFi could create systemic risk, where a failure or de-pegging event in one asset triggers cascading liquidations across the ecosystem.
• Governance and Regulatory Risk: Centralized control mechanisms like asset freezing, while often necessary for compliance, introduce censorship risk. The potential classification of these assets as securities could also fragment liquidity and market access.

Projections and Innovations

The stablecoin market is projected to exceed $300 billion by year-end, with RWA-backed and yield-bearing models expected to capture between 8-10% of the total market share. This will likely drive a capital migration from non-productive stablecoins. Further differentiation is anticipated, leading to a market segmented between regulated, low-risk institutional coins and higher-yield, decentralized alternatives for DeFi-native users.

Conclusion

The stablecoin sector is in a dynamic phase of maturation, defined by the twin forces of institutional-led growth and escalating security risks. H1 2025 confirmed that the threat landscape is shifting toward operational vulnerabilities at centralized entities, while market confidence in reserve assets remains paramount for peg stability. The advance of comprehensive regulation in the U.S. and EU is accelerating the bifurcation of the market between compliant and non-compliant issuers.

The emerging generation of RWA-backed and yield-bearing stablecoins offers new utility, but introduces sophisticated counterparty and strategic risks. In this evolving environment, rigorous risk management, transparent operations, and a proactive compliance posture are the critical determinants of long-term viability. The future of the stablecoin market will be defined by those issuers who can successfully navigate these challenges and earn institutional and retail trust.