M2 Money Supply & Dollar Liquidity
· Updated monthly
As of Feb 2026, US M2 money supply stands at $22.67T, with year-over-year growth of +4.9% — Moderate — M2 growing below 5% YoY. M2 is the Fed's broadest measure of dollar liquidity: currency in circulation plus checking, savings, and money market deposits. When M2 expands rapidly, more dollars are created and some portion flows into digital-dollar instruments including stablecoins. The 2022–23 M2 contraction — the first since the 1930s — coincided with the sharpest stablecoin supply drawdown on record. Data from FRED (series M2SL), updated monthly from Jan 2020.
Stablecoin Market Cap vs M2 Money Supply
Total stablecoin market cap (left axis, green, from Jan 2018) overlaid with US M2 money supply (right axis, blue, from Jan 2020). M2 is a monthly series forward-filled to daily. Regime bands mark each Fed policy period.
M2 Year-over-Year Growth Rate
M2 annual growth rate from Jan 2020. The 2020–21 surge (above +25% YoY) was the largest since WW2 — driven by pandemic fiscal transfers. The 2022–23 contraction (below 0%) was the first in nearly 90 years. Regime bands provide Fed policy context.
Fiscal transfers and QE injected trillions into the economy — M2 grew at the fastest pace since WW2. Excess dollar liquidity flowed into risk assets and digital-dollar instruments. Total stablecoin supply grew from ~$5B to ~$180B over this period.
As QT began and rate hikes tightened credit, M2 contracted year-over-year — a phenomenon last seen during the Great Depression. Stablecoin supply contracted from ~$180B to ~$130B over the same period. T-bill yields made cash alternatives attractive.
M2 returned to positive YoY growth as the contraction base effect faded and bank credit stabilised. Stablecoin supply began recovering during this period — ahead of Fed cuts — consistent with forward-looking demand for dollar-denominated yield instruments.
M2 growth has stabilised in positive territory as the Fed cuts rates and QT pace slows. Stablecoin supply is recovering toward new highs. M2 growth below historical trend (~5–6%) suggests liquidity conditions remain tighter than the 2020–21 expansion phase.
M2SL (M2 money supply): monthly series published by the Federal Reserve, sourced from FRED. M2 includes currency in circulation, demand deposits, savings deposits, retail money market funds, and small time deposits. Units: billions USD.
Monthly to daily conversion: M2SL is reported monthly (typically mid-month revision). This chart forward-fills each monthly reading to daily — each day's value reflects the most recent available monthly figure. This is standard practice for monthly macro overlays on daily data.
YoY growth: Computed as (current month − same month prior year) ÷ same month prior year × 100. Displayed as a percentage. Historical YoY values are forward-filled to daily for chart rendering.
Regime bands: FOMC policy period dates (Mar 2020, Mar 2022, Sep 2023, Sep 2024). Updated manually within one business day of policy changes. Current cutting cycle remains open-ended.
Stablecoin market cap: Daily sum of all tracked stablecoin market caps from CoinGecko snapshots (322 coins) and extended history from DefiLlama. Coverage: Jan 2018 – present.
What this page does not show: M1 (narrower measure), M3 (discontinued in 2006), or components breakdown. For bank credit and reserve dynamics, see Fed balance sheet data on the Fed Liquidity page.