What happens to stablecoin supply when the cost of holding dollars changes? US policy rates and stablecoin indicators on one time axis.
US policy rates and stablecoin supply are plotted on one time axis here, under the Federal Reserve policy regime in force on each date. The overnight benchmark (SOFR) is at 3.62% as of Sep 2026, Fed cutting cycle, against total supply of $303.1B.
SOFR is held as the constant rate signal across this page; the stablecoin indicator it is compared against is selectable from six choices. The shaded bands mark distinct Federal Reserve policy periods. Each comparison surfaces a different rate-transmission channel: supply captures the cycle co-movement with rate regimes, velocity tests whether rate cuts shift stablecoins from idle collateral into active settlement, and dominance shows which issuer gains share as rates move. SOFR is used because the Fed Funds Rate is a monthly series that produces a misleading staircase shape when overlaid on daily data. Notable episodes visible across the regime bands: the March 2022 hike-cycle start, the March 2023 banking stress that produced the USDC depeg, the September 2023 end of the hike cycle, and the September 2024 first cut opening the current easing regime.
The four periods below describe how stablecoin supply moved through each Fed policy regime; supply and its 30-day change are the two comparisons that reach back far enough to show them. Switching to velocity, dominance or issuer concentration narrows the chart to Apr 2025 onward, and these descriptions no longer match what is drawn.
With SOFR near 0.05%, risk-free alternatives yielded nothing and DeFi protocols offering 5–12% APY were substantially more attractive on a relative basis. Total stablecoin supply grew from about $6B to about $180B over the period.
As SOFR rose from 0.05% to 5.3%, T-bill yields exceeded the headline DeFi yield. Total stablecoin supply contracted from about $180B to about $125B over the same window. The relationship is observed; it is not by itself proof that rates caused the rotation.
Despite SOFR remaining near its cycle high of 5.3%, supply stopped contracting and began recovering from its ~$125B trough, consistent with capital responding to rate expectations ahead of actual policy moves.
As the Fed began cutting in September 2024, supply resumed expansion, reaching $303.1B. A declining SOFR compresses the yield advantage of T-bills over on-chain dollar yield.
Rate series. SOFR (Secured Overnight Financing Rate), published each business day by the US Federal Reserve, denominated in percent per annum. The Federal Funds Rate is a monthly series and is shown as regime context rather than a line, because a monthly series drawn against daily data produces a staircase that is visually misleading.
Regime bands. Set to actual FOMC meeting dates, not interpolated or estimated. The four regimes correspond to documented FOMC policy decisions; the current cutting cycle stays open-ended until the next policy change.
Comparison series and their spans. Each comparison is computed over its own full history before any window is applied.
Which compilation each figure comes from. Supply and its 30-day change are drawn on the chart from a daily supply series compiled on the same universe definition as the platform’s headline figure, so it can differ from the headline total by a fraction of a percent — two compilations of the same base concept, reconciled daily. Every current-day figure shown as text on this page is the headline figure, not the chart series’ last value.
What this page does not prove. The patterns visible across regime bands describe co-movement, not causation. Stablecoin indicators respond to many things besides US short-term rates, among them offshore demand, regulation, on-chain yield and dollarization in emerging markets. Use the page to test the rate-transmission hypothesis under each lens, not to attribute single causes.
Updated daily. SOFR is published with a one-business-day lag. See the methodology for data sources and coverage.
SOFR (Secured Overnight Financing Rate) is the primary US risk-free benchmark rate since 2023. When SOFR rises, yields on T-bills and money market instruments rise with it, making stablecoins held in DeFi less attractive relative to traditional cash equivalents. Empirically, the 2022–23 Fed hike cycle coincided with stablecoin market cap contraction.
The empirical record shows the stablecoin total market cap contracted from roughly $180B to $125B as the Fed raised rates from 0% to 5.25% between March 2022 and September 2023. The relationship is observed; it is not by itself proof that rates caused the rotation — the opportunity-cost channel (risk-free yields exceeding DeFi yields) is one of several channels discussed in the IMF’s Understanding Stablecoins.
Supply and its 30-day change are compiled from a daily series beginning Nov 2017, so they cover every policy regime this page describes. Velocity, USDT and USDC dominance and the Issuer Theil Index begin Apr 2025, because each needs per-coin volume, per-coin share or an issuer mapping that the deep supply compilation does not carry.
Selecting one of those four narrows the chart to the current policy period. The regime descriptions further down are written about supply for that reason.
Market cap is only one face of how rates transmit to stablecoin markets. Rate cycles also affect velocity (settlement activity), dominance (which issuer wins flows), the pace of issuance, and concentration (issuer fragmentation). The comparison selector lets analysts test the rate-transmission hypothesis against each of these lenses, not just total supply.
Through the 2022–23 hike cycle USDT’s share of total supply rose and USDC’s fell. The divergence is in the data; which mechanism produced it is not something this page measures.
Both are the 30-day percent change in total stablecoin supply. This page applies it to the long-run supply series it plots, so the change can be read across every policy regime shown. The Supply Shock Index published at /charts/supply-shock/ applies it to the canonical supply series and is the figure to cite; the two readings differ slightly because the underlying compilations do.
That page also breaks the measure down by coin, which this one does not.
The shaded bands mark distinct Federal Reserve policy periods: the zero-rate era, the hike cycle, the high-rate pause, and the current cutting cycle. They are set to actual FOMC meeting dates, not estimated.
As of Sep 2026, SOFR stands at 3.62%. SOFR reflects the cost of overnight dollar borrowing collateralized by US Treasuries, the effective floor for US dollar money market yields. It updates on business days.
SOFR is a daily transaction-based rate. The Federal Funds Rate is a monthly policy target. For daily chart overlays, SOFR provides a cleaner daily signal. The Fed Funds regime context is shown as background bands rather than a line, as monthly series produce misleading staircases when overlaid on daily data.