Tether’s USDT Supply Falls $1.5 Billion In February, Largest Drop Since FTX Collapse

Tether’s (CRYPTO: USDT) USDT supply has contracted by about $1.5 billion in February, marking its sharpest monthly decline since the collapse of FTX in 2022.

Largest Monthly Contraction Since 2022

Tether’s USDT is on track for its biggest monthly supply contraction in more than two years.

Circulating supply fell roughly $1.5 billion in February, following a smaller decline in January and reversing months of steady growth, Bloomberg reported on Friday.

The pullback comes amid a broader crypto market selloff that has wiped out about $2 trillion in value since October. USDT supply peaked near $187 billion in early January and had fallen below $184 billion as of Feb. 18.

Tether reported a valuation of about $185.6 billion on Feb. 9, which has since slipped to roughly $183.6 billion.

Stablecoin Market Continues To Grow

Despite USDT’s decline, the broader stablecoin market continues to expand. Total stablecoin supply rose to $304.6 billion in February, driven largely by growth in USD Coin, which climbed nearly 5% to $75.7 billion.

In 2025, stablecoin transaction volume surged 72% to $33 trillion. USDC led with $18.3 trillion in volume, compared with $13.3 trillion for USDT.

Pro-stablecoin policies under President Donald Trump have supported broader adoption, including the launch of USD1 by World Liberty Financial (CRYPTO: WLFI).

However, USDT’s recent contraction signals cooling momentum after an extended period of expansion.

Lawmakers continue to debate U.S. stablecoin policy, including bank concerns outlined in last week’s “Yield and Interest Prohibitions Principles” document.

Any restrictions on stablecoin rewards, officials have indicated, would likely be narrowly tailored.

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