Standard Chartered flagged in a Tuesday note that stablecoin velocity has doubled over the past two years, with coins now changing hands an average of six times per month. The development prompted the bank to revisit a core assumption underpinning its stablecoin market forecast. That forecast had been built on the premise that velocity would remain stable, meaning the new data represented a meaningful shift in the model’s foundation. Despite this, the bank is standing by its projection.
Geoff Kendrick, the bank’s global head of digital assets research, acknowledged that higher velocity theoretically reduces the number of coins needed to support the same transaction volume. However, he argues the forecast remains valid because new use cases are adding to overall stablecoin activity rather than simply redistributing it. Crucially, the higher-velocity use cases have not eroded the lower-velocity savings use case seen in emerging markets. Kendrick described these developments as net positive for the market’s trajectory.
According to Kendrick’s analysis, it is USDC, the stablecoin issued by Circle, that has been the primary driver of these new use cases. USDC, which holds roughly 25% of the stablecoin market, began diverging from Tether‘s USDT in mid-2024 as it started displacing traditional banking infrastructure. That trend gained further momentum after the GENIUS Act established a federal regulatory framework for stablecoins last summer. The legislation appears to have accelerated USDC’s role as a replacement for conventional financial rails.
A second, more acute surge in USDC velocity was observed starting in October 2025, specifically on the Solana and Base blockchain networks. Kendrick attributes this spike to early payments made by AI agents using x402, an open-source payment protocol developed by Coinbase. Those elevated volumes have since retreated, which the bank suggests may indicate the initial surge was temporary in nature. The episode nonetheless highlights how emerging technology applications are beginning to interact with stablecoin infrastructure.
USDT’s velocity, by contrast, has remained comparatively stable, reflecting its dominant use as a savings instrument in emerging markets where turnover tends to be lower. The note argues that the two leading stablecoins have effectively diverged by function: USDT serving emerging-market savers and USDC increasingly substituting for traditional financial systems. This bifurcation offers a clearer picture of how different segments of the stablecoin market are evolving. Standard Chartered says it will monitor velocity more closely going forward, viewing it as a critical variable in its market modeling.
Kendrick concluded that the bank’s $2 trillion market capitalization estimate for the end of 2028 remains intact. He framed stablecoin velocity as a key input that warrants closer attention in future assessments. The bank’s willingness to revisit its assumptions while maintaining its headline forecast reflects both the complexity of the evolving market and confidence in the underlying demand drivers. Whether AI-related payment volumes recover or expand further is likely to be a focal point in subsequent analysis.
Originally reported by Decrypt.
