Stablecoin payments surge 45% while supply stalls in Q3 2026

A quiet "power shift" is underway in the stablecoin space: the business of issuing is declining in value, while the business of distribution and settlement is rising.

One number says it all—according to on-chain analytics firm Allium, stablecoin payment volume reached $482 billion in the first three quarters of this year (January–September), a 45% increase; yet during the same period, the total supply of stablecoins has stalled.

Money is flowing wildly, but the minters aren’t profiting from the flow—that’s the biggest story about stablecoins in 2026.

In traditional narratives, the value of stablecoins is anchored to "issuance volume"—the more coins issued, the larger the market share, and the more profit can be made through reserve earnings (earning interest by depositing dollars into government bonds).

But the 2026 data breaks this equation.

• Supply stagnation: According to Allium, as of the end of September, the total value of circulating stablecoins was approximately $305 billion, with only a 0.4% increase year-to-date—CoinDesk’s mid-October headline bluntly stated “Supply Stagnation.”
• Usage is surging: Allium data shows that stablecoin payment volumes reached $482B in the first three quarters of this year, a 45% increase; global payment giants like Visa, Mastercard, and Stripe are integrating crypto assets into cash settlement networks, making "swiping stablecoins" a real consumer behavior.

Supply and demand have decoupled. This means: the value of stablecoins is shifting from "how much is issued" to "where and by whom they are spent and settled."

The payment giants clearly see this: since issuance is no longer scarce, they might as well step in and seize distribution themselves.

On September 30, 2026, Open USD (OUSD), a USD-pegged stablecoin issued by the Open Standard Alliance and supported by payment institutions including Visa, Mastercard, and Stripe, officially launched—this alliance was jointly initiated in June 30, 2026, by over 140 institutions including Coinbase, Stripe, and BlackRock. Its key advantage lies not in technology, but in its incentive model: after deducting management fees, reserve earnings are distributed back to distribution partners based on their participation, with zero fees for minting and redeeming, and no limits.

This strikes directly at the weakness of established stablecoin issuers—but the weakness isn't about "whether to pay channels," but "how to pay them."

Circle disclosed on October 16 that of the approximately $1.4B in revenue expected in the first half of 2026, about $819M (59%) has been paid to USDC distribution partners and transaction costs, and approximately $473M (34%) has been reinvested in licenses, banking relationships, and compliance, leaving a net margin of only about 7%; over 150 partners are already sharing in the economic benefits of USDC. In other words, channels have long taken the lion’s share. The true differentiator of Open USD is replacing individually negotiated channel splits with a transparent, open rule set available to all distributors—new competitors aren’t taking away the splits themselves, but the power to set the rules for those splits.

In response to "poaching," Circle chose to address it head-on—publicly defending the economic model of USDC by emphasizing that stablecoin growth should be built on compliance and liquidity, not on buying channels with higher payouts.

Circle’s Chief Business Officer, Kash Razzaghi, responded bluntly: new entrants promising to “distribute the vast majority of profits” are offering “a stablecoin that distributes everything but funds nothing.”

But the most intriguing detail is that Circle’s largest USDC partner, Coinbase, is also betting on Open USD.

When your primary distribution channel begins to hedge both sides, it’s the most direct signal that control over distribution has slipped away. The issuer is being priced by the channel—this is exactly the same script as “channel rules” in traditional finance, except now it’s playing out with stablecoins.

If payment giants are the obvious competitors, then banks are the hidden adversaries.

The latest working paper (BIS Working Paper No. 1382) from the Bank for International Settlements (BIS) presents a concerning conclusion: banks can slow the growth of stablecoins simply by raising interest rates for depositors.

The paper uses U.S. weekly data from January 2019 to June 2025 to find:

• Stablecoins and bank deposits are competing for the same pool of money;
• Most stablecoins do not pay interest, so when banks raise deposit rates, funds flow back into traditional accounts;
• The paper estimates that for every 1-basis-point (0.01pp) increase in U.S. bank deposit rates, the ten-week growth rate of stablecoins could decline from 15% to 12%;
• This substitution effect is particularly pronounced when the federal funds rate exceeds approximately 3%—in a high-interest-rate environment, banks have greater incentive to pass on Fed rate hikes to depositors.

Be sure to note three key limitations of the paper: first, the effect size is small—one basis point corresponds to approximately a 3-percentage-point change in the ten-week growth rate; second, these figures represent historical averages over the sample period, not forecasts for the future; third, there are significant differences among issuers—the same interest rate increase affects the ten-week growth rate of USDC by about 4.8 percentage points, but only about 1.9 percentage points for USDT.

In other words, banks may not need legislation to ban stablecoins—simply adjusting the lever of "interest-bearing deposits" could constrain the interest-free float on which stablecoins rely. For the narrative of "issuance as a barrier," this is an unavoidable variable.

1. Channel commission rate: What percentage of reserve earnings does Open USD allocate to its channel partners? Is Circle forced to follow suit? — This is the most quantifiable indicator of “issuance rights vs. distribution rights.”
2. Bank interest rates: Will U.S. bank deposit/money market fund rates rise further? Has the "3% threshold" described by the BIS been practically triggered?
3. Payment integration: Do Visa, Mastercard, and Stripe integrate stablecoin settlements for mainstream merchants? Can the 45% growth rate in payment volume of $482B be sustained—this is the key metric to test whether "usage > issuance" holds true.

This round of signals points to the same conclusion: the focus of stablecoin competition is shifting from "issuance rights" to "distribution and settlement rights."

• Non-scarce issuance—more players capable of compliant token issuance are entering the market, and banks and payment giants can join at any time;
• Distribution and settlement are scarce— whoever can integrate stablecoins into real-world payment, settlement, and custody scenarios holds the pricing power.

Payment giants launch Open USD, BIS warns banks about interest rate leverage, Circle publicly defends its revenue-sharing model—three developments that, from different angles, confirm the same trend: the profit pool in the stablecoin industry is shifting from the “minting” stage toward “traffic entry points” and “settlement pipelines.”

Reference source

1. Stablecoin supply stalls, but payments jump 45% as Visa, Mastercard and Stripe connect crypto to cash — CoinDesk
2. Circle defends USDC economics as stablecoin rivals court its partners with bigger cut — CoinDesk
3. Banks can slow stablecoin growth by paying depositors more, BIS paper finds — Ledger Insights
4. Banks could slow stablecoin growth by paying savers more, BIS paper finds — CoinDesk
5. Mastercard integrates BVNK stablecoin platform as Visa goes live with prefunding — Ledger Insights
6. Circle says 59 cents of each revenue dollar went to USDC partners and transaction costs — Unchained (Yahoo Finance)

The above is a paraphrase and analysis of publicly reported information and does not constitute an evaluation of the related companies or products.

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