Solana stablecoin supply reaches $10B for first time

Solana's (CRYPTO:SOL) stablecoin supply has reached a historic milestone, exceeding $10 billion for the first time.

This represents a remarkable increase of nearly 110% since the beginning of January, rising from $5.1 billion to $10.8 billion.

The surge is primarily attributed to the significant issuance of Circle's USDC (CRYPTO:USDC) on the Solana network, which now constitutes about 80% of the total stablecoin supply.

USDC alone has nearly doubled, increasing from $4.2 billion to approximately $8.2 billion.

In contrast, Tether’s USDT (CRYPTO:USDT) accounts for around $1.96 billion of the stablecoin market on Solana.

The growth in stablecoins aligns with a broader trend in decentralised finance (DeFi) on the Solana network, particularly influenced by the recent launch of memecoins associated with the Trump family.

“The recent increase in Solana’s stablecoin supply signals rapid adoption growth, primarily driven by retail interest in the TRUMP memecoin,” commented Eden Au, research director at The Block.

This influx of stablecoins has also led to heightened trading activity, with Solana’s daily transaction fees reaching record levels exceeding $33 million last week.

As Solana continues to expand its DeFi ecosystem, stablecoins are becoming increasingly integral to facilitating liquidity and trading on the platform.

Historical data suggests that spikes in stablecoin supply often precede bullish movements in Solana's native token, SOL.

If current trends persist, analysts predict that SOL could see significant price increases in the coming months.

However, despite this growth, market participants remain cautious due to relatively low lending yields for stablecoins compared to previous periods of high volatility.

At the time of reporting, the Solana (SOL) price was $260.08.