{
  "id": 27013,
  "title": "Stablecoins and (Non)Crypto Shocks: A 2026 Update",
  "url": "https://urgent.news/2026/07/31/stablecoins-and-non-crypto-shocks-a-2026-update",
  "topic": "finance",
  "section": "Finance & Markets",
  "published": "2026-07-31T11:00:00.000Z",
  "source": {
    "name": "Liberty Street Economics",
    "slug": "liberty-street-economics",
    "url": "https://libertystreeteconomics.newyorkfed.org/2026/07/stablecoins-and-noncrypto-shocks-a-2026-update/"
  },
  "original_language": "en",
  "account": "The market capitalization of U.S. dollar stablecoins has surged by $71 billion (30 percent) since our last update in April 2025, reaching approximately $308 billion. This growth coincided with the implementation of the GENIUS Act in July 2025, which introduced the first federal regulatory framework for payment stablecoins. The two biggest issuers, Tether (USDT) and USDC, control over 80 percent of the industry's assets. However, USDC's reserve holdings are notably different from its counterpart. While USDC primarily holds cash and short-term U.S. government securities, USDT's reserves are more diversified, including corporate bonds, gold, Bitcoin, secured loans, and other investments.\n\nFollowing the collapse of Silicon Valley Bank (SVB) in March 2023, Circle, the issuer of USDC, revealed that around 8 percent of USDC's reserves were deposited in SVB. Subsequently, USDC's price fell significantly below $1.00, and it experienced substantial net outflows. Moreover, the Circle Reserve Fund (CRF), which makes up around 86 percent of USDC's reserves, underwent a notable shift in its composition. The weighted average maturity (WAM) of the CRF dropped below that of median Treasury-only money market funds (MMFs) following the SVB failure, indicating a reduction in interest-rate risk exposure. The CRF also increased its exposure to repurchase agreements (repos) from zero to over 90 percent of its net assets, significantly lowering its interest-rate risk exposure and changing its counterparty risk profile.",
  "summary": "Stablecoins are digital assets whose value is pegged to that of a fiat currency, typically the U.S. dollar at a peg of $1.00 per token. In a previous blog post , we described the rapid growth of stablecoins through early 2025, highlighted changes in stablecoins’ reserve-asset composition, and examined their reactions to Bitcoin price shocks. In this post, we document the growth of stablecoins…",
  "key_points": [
    "U.S. dollar stablecoin market cap rises 30% to $308 billion since April 2025.",
    "Tether (USDT) and USDC control 80% of assets, USDC holds cash, Treasuries.",
    "SVB collapse in 2023 led to USDC price drop and reserve composition shift."
  ],
  "editors_take": null,
  "illustration": null,
  "coverage": {
    "outlets": 1,
    "also_reported_by": []
  },
  "ai_generated": true,
  "disclaimer": "Summaries, key points and the editor’s take are written by software from other outlets’ reporting and may contain errors — always check the linked original."
}