Circle: Why do 95% of stablecoins ultimately go to zero?

Title: The Stablecoin Trap: Issuing a Stablecoin Without the Infrastructure to Run One

Author: Kash Razzaghi, Circle

Translation: Peggy, BlockBeats

Editor’s Note: As regulatory clarity increases and institutions enter the space, stablecoins are evolving from a technical tool into a critical financial infrastructure. This article points out that issuing stablecoins is not simply a technical choice but a long-term strategic decision involving trust, liquidity, and compliance capabilities. Most projects stall before reaching scale, and the market is naturally converging toward a few mature networks. For most companies, the real question isn’t “Should we issue a coin?” but “How can we effectively use stablecoins to create growth opportunities?”

Below is the original text:

In recent months, I’ve repeatedly had familiar conversations with executives from some of the world’s largest companies. They are highly interested in stablecoins that can transfer almost instantly and cross borders, such as USDC and EURC—digital versions of the US dollar and euro. Many are also pondering: Should we issue our own stablecoin?

This impulse is understandable. The market has already reached a real scale with sustained growth momentum. By 2025, the total market cap of stablecoins will grow from approximately $205 billion on January 1, 2025, to over $300 billion by December 31, 2025. USDC, issued by Circle, remains one of the core assets in this category, ending 2025 with a market cap exceeding $75 billion.

But before truly entering the space, every company should ask itself one question: Are you just looking to use stablecoins for your business, or are you planning to genuinely enter the “issuance” business?

This is not a technical issue but a strategic one: does issuing currency belong to the core of your business model?

Relatively speaking, creating a stablecoin on a blockchain is actually the easiest part. Essentially, it’s just a software engineering practice: writing and deploying a blockchain-based token contract. With an engineering team, or in some cases leveraging white-label partners, a token can go live in a relatively short time. But once the product is operational, managing a stablecoin means supporting a 24/7 financial infrastructure.

To operate a trustworthy, regulated stablecoin—one that meets the expectations of institutions, regulators, and millions of users—you must manage real-time reserves across different market cycles, reconcile daily with multiple banking partners, undergo independent audits, and complete compliance and regulatory reporting in multiple jurisdictions. This requires building an around-the-clock compliance, risk management, treasury, and liquidity operation system, with clear escalation and resolution mechanisms under stress scenarios, and zero tolerance for errors. These capabilities are not something you can outsource once and forget; as scale increases, they will continually accumulate and amplify in cost, complexity, and reputational risk.

From a systemic perspective, each new closed-loop stablecoin further fragments liquidity and trust. Each issuer repeats the process of building reserves, compliance systems, and redemption channels, which weakens the overall depth and resilience that stablecoins rely on during stress. In contrast, integrating with USDC from day one allows liquidity, standards, and operational capabilities to be consolidated into a widely adopted, unified network.

For corporate executives evaluating this decision, the operational differences between these two paths become especially clear:

The Temptation of Taking Shortcuts

Today, a large number of new entrants—from fintech companies and payment providers to crypto projects—are exploring or directly launching their own stablecoins. The growth of the stablecoin market in 2025 reflects both the gradual clarity of the regulatory environment and rising institutional interest. But the reality is that, despite hundreds of stablecoin projects launched, about 95% have never truly achieved lasting, global scale.

Some believe they can replicate the same economic returns without bearing heavy operational costs. But the reality is far from romantic. Whether issuing independently or via white-label services, you are entering an industry where trust, liquidity, and scale are matters of life and death.

Sometimes, the cost of mistakes is even measured in trillions. According to media reports earlier this year, one issuer accidentally minted $300 trillion worth of tokens due to an operational error. Although fixed within minutes, it was enough to make headlines. In another case, a well-known stablecoin briefly de-pegged during market turbulence, illustrating that even minor infrastructure flaws can be magnified and propagated under pressure.

These incidents remind us that whether a stablecoin can stand the test depends on operational rigor under high-stress conditions. Market participants and regulators are watching closely.

Trust Is the True Network Effect

Anyone can create a token on a blockchain. In fact, thousands already exist—most are minted in minutes and forgotten just as quickly. Even within the stablecoin niche, over 300 projects have launched, but only a handful carry nearly all real-world usage and value; the vast majority—about 95%—have never truly succeeded.

The difference isn’t in technology but in scale and trust. The real challenge for stablecoins begins at the expansion stage: as trading volume grows across different markets and cycles, how do you maintain liquidity, redemption capacity, compliance, and system availability?

You can mint a token in minutes, but trust cannot be minted that quickly. Trust comes from transparency, scale, and consistent redeemability across market cycles, accumulated over time. This is why stablecoin markets ultimately concentrate in the hands of a few issuers—and why, as of January 30, 2026, USDC’s total settled volume has exceeded $60 trillion.

Instead of Reinventing the Wheel, Choose Partnership

For most companies, the right question isn’t “How should we issue our own stablecoin?” but “How can we integrate stablecoins into our business to unlock new growth?”

With USDC and EURC, companies can embed digital dollars and euros today, gaining near-instant settlement, global reach, and interoperability across dozens of blockchains, without bearing the complexity of reserve management and regulatory compliance themselves.

Writing the Next Chapter Together

The stablecoin industry is entering a new phase. Policymakers are crafting clearer rules, institutions are raising their standards, and the market is converging on a simple consensus: trust, liquidity, and compliance are the true moats.

The goal isn’t to have more stablecoins but to have fewer, better ones—those that respond to current needs with shared liquidity, transparent reserves, and proven performance across cycles.

For institutions developing stablecoin strategies, the first step shouldn’t be deciding “what to create,” but “who to create with.” If you want stablecoins to empower your business but don’t want to be a stablecoin issuer yourself, the time-tested choice is clear: talk to Circle, use USDC.