Matrixport: Stablecoin Liquidity Contracts, Short-Term Purchasing Power in Crypto Market Also Weakened

According to today's chart released by Matrixport, the "GENIUS Act" is expected to prohibit stablecoin issuers from paying interest or yields to holders. Funds may therefore shift to yield-generating alternatives such as tokenized money market funds. USDC has seen net redemptions of approximately $6.5 billion over the past six weeks, leading to a contraction in stablecoin liquidity and a weakening of short-term purchasing power in the crypto market.

Simultaneously, funds are flowing out of stablecoins into traditional safe-haven assets like gold and silver, further contracting the supply of stablecoins. Accordingly, Circle is shifting its focus from "market cap size" to "transaction activity," and through initiatives like the Circle Payment Network and partnerships with companies like Intuit, is promoting the use and payment adoption of stablecoins in real-world scenarios.