Cumberland Stablecoin Commentary: August 16th

Author: Paul Kremsky | 5-minute read | August 16, 2026

Theme: General Drawdown in Stablecoin Market Cap

Since May 20, the stablecoin market cap has shrunk from around $321B to about $305B. While stablecoin price action has not been dramatic, this ~5% drawdown is actually the third largest in the industry's history. The first was the drawdown in April 2022, which famously started with the wipeout of $16B of UST. The 2022 drawdown lasted over a year, and it was driven by fundamental questions about the stablecoin industry; the collapse of UST was followed by a selloff and wave of redemptions on USDT, and in early 2023, the collapse of Silicon Valley Bank, Silvergate, and Signature Bank impacted USDC.

Other drawdowns in stablecoin market cap, such as the 20% drop in 2019, were marked by price depegs. In 2019, USDT traded briefly below $0.96 and stayed below $0.99 for a prolonged period; by 2022, the market was more efficient, and even with the size and rapid pace of the redemptions, USDT didn't trade below $0.995 — compare the paths from peak.

In the current drawdown, USDT has mostly traded in a range between $0.9988 and $0.9992, while USDC has for the most part traded above $0.9997 — these represent almost no discount whatsoever, and cannot be labeled a "depeg" by any definition. This drawdown does not appear to be a function of the stablecoins themselves; just two weeks ago, Tether released its financials, showing a buffer of over 2%, and it did not garner much attention. Circle, of course, is a publicly traded company that files its financials on a regular basis, and the stock actually rallied 10% in the past week. Instead, this selloff appears to be a fairly orderly off-ramping of crypto from crypto markets.

Theme: Increase in Yield-Bearing Onchain Cash Equivalents

While the overall stablecoin market cap has been in decline, there's been widespread growth in yield-bearing onchain cash equivalents, which have grown by 101% since the start of the year. This is not inconsistent with the trend of off-ramping from crypto. Because many of these products are financial instruments, and because some of them do not trade for $1 (but instead accrue price over time), they are actually poor assets for trading digital assets. Flows into these stablecoins represent a move away from crypto tokens, but a move which keeps the assets on digital rails. Again, this is consistent with other trends we're seeing in the industry. Even as token prices have declined in 2026, we have seen a growth in the usage of digital rails for trading other asset classes, including equities, commodities, and FX, on venues such as Hyperliquid, Polymarket, and even centralized exchanges like Kraken, which listed nearly 300 equities in July. Stablecoin rails are being used for yield-generation even as stablecoin usage in crypto trading has decreased.

Theme: Signs of Life in Non-USD Stablecoins

At Cumberland, we've been talking about Non-USD stablecoins for years (The Growth Potential of Non-USD Stablecoins). This year, we're finally starting to see some signs of life, with Non-USD stablecoins now representing over $1.5b of market cap, up from $1.3b to start the year. As mentioned above, one of the major themes for the year is a movement of traditional financial use-cases to blockchain rails, and stablecoin FX is no exception. There are a growing number of blockchains which focus exclusively on stablecoins, including Tempo and Arc, which Circle announced would launch on September 16th. Separately, a renewed push by European regulators on MiCA enforcement has increased the focus by centralized exchanges to support EMI-licensed stablecoin issuers. The dominant stablecoin here, to date, is Circle's EURC, which has grown from $658m at the start of the year to $756m today. Interestingly, on Cumberland's OTC desk, we have seen a much sharper rise, with OTC counterparties increasingly trading EURC vs USDC.

Note: OTC Stablecoins Availability

Stablecoins mentioned in this report may be available for trading via Cumberland's OTC desk, depending on jurisdictional availability, including USDC, USDT, SOFID, and USDPT, as well as multiple Non-USD stablecoins.

Cumberland's OTC Stablecoin desk allows for stablecoin-stablecoin trades, as well as on- and off-ramping.

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