Key Takeaways:

• Ethereum’s stablecoin dominance will shrink by 10%, but overall supply volume will increase almost five times.
• The overall stablecoin market may hit $1.7 trillion by the end of the decade.
• A strong layer-2 network and dwindling mainnet gas costs cement Ethereum’s position.

The total stablecoin supply on the Ethereum network has surged to $180 billion, a record high on the second-largest blockchain network.

With a 60% dominance in stablecoins, Ethereum’s market share is expected to drop to 50% by the end of the decade. Even then, the prediction shows that the stablecoin volume on Ethereum will explode. The estimates? Around $850 billion in stablecoins onchain.

Ethereum remains the settlement layer

Ethereum’s stablecoin dominance is not by chance, but by design. There are other chains, like Tron and Solana, that are faster and handle large volumes of stablecoin. Yet Ethereum has become the global settlement layer, where the world’s largest pools of capital reside.

Money flows where money already is, and Ethereum houses some of the deepest liquidity. This means whales and large-scale institutions can move stablecoins (and other cryptocurrencies) with minimal slippage.

Ethereum has had certain issues, such as having higher gas fees than other blockchains. However, layer-2 networks with near-zero fee structures and Ethereum itself drastically reducing gas costs have made it more economical than ever to transact on the network.

Learn More: What is Gas and Why Does it Cost Money?

Overall, the stablecoin market is expected to rise, too

Ethereum is making a strong case to remain the largest stablecoin network. With the overall market expected to hit $1.7 trillion, this is in line with an earlier, but more optimistic, prediction of $2 trillion by Standard Chartered.

USDC (USDC), the second-largest stablecoin, is gaining traction as it hit 1 billion unique transactions in March 2026. The increased use of USDC is due to its regulatory-friendly setup, giving it an edge in markets like the EU, where it is compliant with the Markets in Crypto-Assets regulation.

Regular banks are also seeing the potential and jumping on the bandwagon. A consortium of US banks is already working toward launching tokenized deposits. The tokenization offers FDIC insurance to depositors, which current stablecoins lack, giving token holders regulatory insurance.

The stablecoin game is not just limited to US dollar-pegged coins but also other currencies like the euro. Tether, the company behind USDt (USDT), has EURt (EURT), and Circle, the company behind USDC, has EURC (EURC). Even European banks are joining the stablecoin race, with a 12-member alliance looking to launch a EUR-backed stablecoin.

Related: Circle Expands Stablecoin Transfers to Asia for Faster Global Payments

Stablecoin centralization remains an issue

Stablecoins have a unique place in the crypto world. Designed to remain as close to their fiat counterpart as possible, these coins take volatility out of the equation. This means value transfer can happen without the sender and receiver worrying about the price changing.

However, most stablecoins (like USDT and USDC) are centralized and only use blockchain as a medium of transport. Tether and Circle have the ability to freeze their issued coins, which they have done in the past, following requests from either law enforcement agencies or assets stolen through hacks and exploits.

This, and the risk of stablecoins de-pegging, will always keep users on their toes.