Stablecoin Market Surges 23.5% to $252B in H1 2025 Amid Security Risks and Regulatory Hurdles

The stablecoin market reached $252 billion in the first half of 2025, a significant jump from $204 billion earlier in the year, according to a report by CertiK. This growth was driven by increased adoption of stablecoins as tools for global payments, with monthly settlement volumes hitting $1.39 trillion. However, the report also highlighted a growing list of security vulnerabilities and regulatory challenges that threaten the sector’s stability. CertiK’s Skynet Stablecoin Framework, a six-factor risk assessment model, revealed inconsistent security practices across major stablecoin issuers, despite their expanding influence in the digital asset ecosystem.

Leading the market in liquidity is Tether’s USDT, which dominates on the Tron network. Meanwhile, USD Coin (USDC) has closed the gap by securing a MiCA (Markets in Crypto-Assets) license under EU regulations and expanding its supply to $61 billion. Other high-performing stablecoins, including PYUSD, RLUSD, USDG, and FDUSD, have adopted innovative strategies such as yield-bearing programs and cross-chain integrations to attract users. PYUSD, for instance, doubled its supply by integrating with the Solana blockchain and introduced a 3.7% yield program to incentivize adoption.

Despite these advancements, the first half of 2025 saw alarming security incidents totaling $2.47 billion in losses, with 344 recorded attacks. The majority of breaches stemmed from poor key management and flawed logic in liquidity pool operations, rather than smart contract vulnerabilities. A notable incident involved the Bybit wallet breach in February, which accounted for $1.5 billion in losses due to a compromised private key. Similarly, FDUSD’s brief depeg to $0.76 in March exposed weaknesses in reserve management, though transparency and rapid interventions restored its value above $0.995 within 12 hours. These events underscore the fragility of confidence-based systems and the critical role of real-time transparency in crisis mitigation.

Regulatory developments are reshaping the market as institutions and governments push for stricter compliance. In the U.S., the STABLE and GENIUS Acts, alongside the EU’s MiCA framework, are creating a two-tier system where only compliant issuers can compete with unregulated counterparts. Financial institutions like Société Générale, Santander, Visa, and Stripe have launched stablecoin pilots, signaling a convergence between traditional finance and blockchain-based assets. CertiK also noted the rise of real-world asset-backed and yield-bearing stablecoins, which could capture 10% of the $300 billion market by year-end. However, these models introduce new risks related to off-chain custody and complex strategy execution, demanding stronger risk management frameworks.

The report emphasizes that as stablecoins become more deeply embedded in decentralized finance (DeFi) and centralized exchanges (CEX), interconnected vulnerabilities are amplifying systemic risks. Attacks on platforms like Infini and Cetus Protocol—resulting in $49.5 million and $225 million in losses, respectively—highlight the cascading effects of protocol-level weaknesses. CertiK warns that attackers are increasingly targeting operational infrastructure, particularly in centralized platforms, to exploit human error and inadequate security protocols. This trend shifts the focus from technical smart contract flaws to operational governance and third-party risk management.

With regulatory scrutiny intensifying and user adoption surging, CertiK urges stablecoin issuers to prioritize compliance, transparency, and robust security measures. The report concludes that issuers unable to adapt to evolving standards will struggle to compete in a market increasingly defined by institutional trust and regulatory clarity. As the sector matures, the ability to balance innovation with risk mitigation will determine which stablecoins thrive in the next phase of the digital asset landscape.