The cryptocurrency landscape is evolving rapidly in June 2025, with Ethena USDe stablecoin becoming a major player in the decentralised finance (DeFi) industry.
USDe has fought against stiff competition from several digital assets to become the third-largest stablecoin by market capitalisation.
With this statistic, the stablecoin trails only Tether’s USDT and Circle’s USDC – the two largest stablecoins by market capitalisation.
With a circulating supply exceeding $5.8 billion, USDe has outpaced competitors like DAI, World Liberty Financial USD (USD1), and PayPal USD (PYUSD) to secure its spot as a major player in the DeFi ecosystem.
This remarkable ascent, driven by innovative strategies and strategic partnerships, sparks critical questions about its future dominance.
More importantly, it begs questions such as ‘What is the role of stablecoins in global finance?’ and ‘What is the potential size of the stablecoin market?’
Will Ethena Stablecoin Cement Its Place as the 3rd Largest Stablecoin?
As of June 12, 2025, Ethena’s USDe has achieved a meteoric rise, amassing over $3 billion in total value locked (TVL). Unlike traditional stablecoins backed 1:1 by fiat reserves, USDe employs a synthetic dollar model. Under this, the stablecoin maintains its $1 peg through a delta-neutral strategy that combines collateralised stablecoins with futures positions.
This approach generates yields through Ethereum staking and derivatives, which offer investors attractive returns. Historically, Staked USDe (sUSDe) has delivered low-to-mid-teen annual percentage yields (APY). Consequently, USDe has attracted institutional and retail investors seeking stability with passive income.
However, challenges are always present within the crypto economy. Regulatory scrutiny, particularly in Germany, has raised concerns about compliance.
In March 2025, BaFin (German Federal Financial Supervisory Authority) halted USDe sales by Ethena’s German subsidiary. The regulatory body cited “serious deficiencies” in licensing procedures under the European Union (EU)’s Markets in Crypto-Assets (MiCA) regulations.
In April 2025, BaFin ordered Ethena GmbH, the German subsidiary, to wind up its business and imposed sanctions on them.
Although secondary market trading remains unaffected, such hurdles could slow adoption in key markets.
Nevertheless, Ethena’s partnerships with major exchanges like Bybit and MEXC bolster its credibility, with investments of $20 million and $36 million ($16 million in Ethena and $20 million worth of USDe), respectively.
Additionally, integrations with over 20 blockchains, including TON for Telegram’s user base, Zircuit, Zodia, Venus, XLayer, Thruster, Solana, Morpho, Kava, Injective, Chainlink, and Anchorage, enhance accessibility.
If Ethena navigates regulatory landscapes adeptly and maintains its peg’s stability, it could solidify its third-place ranking.
ENA Potential
Ethena’s governance token, ENA, and its proposed integration with the Ethereal Decentralised exchange (DEX) signal a commitment to transparency and on-chain reserve management.
This strategy differentiates USDe from competitors, potentially attracting more DeFi users. Yet, competition remains fierce. Tether’s USDT, with a $155 billion market cap, and USDC, holding nearly 25% of the market, dominate due to their fiat-backed models.
To maintain its edge, Ethena must continue innovating while addressing regulatory concerns proactively.
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Will Stablecoins like Ethena Become the New Fiat Currencies?
Stablecoins like USDe are reshaping finance by bridging traditional and decentralised systems. Unlike volatile cryptocurrencies, stablecoins offer price stability, making them ideal for payments, remittances, and DeFi applications.
USDe’s integration into Telegram’s ecosystem, with its billion-strong user base, exemplifies this potential, enabling seamless savings, lending, and payments.
As a result, stablecoins are increasingly viewed as digital analogues to fiat currencies, particularly in regions with unstable local currencies.
However, several barriers prevent stablecoins from fully replacing fiat. Regulatory frameworks, like MiCA in the EU, impose strict reserve and compliance requirements, as seen in Ethena’s German setback.
Additionally, central banks are developing digital currencies (CBDCs), which could compete with stablecoins by offering government-backed stability.
Despite these challenges, stablecoins’ decentralised nature and yield-generating potential, as demonstrated by USDe and others, appeal to users seeking alternatives to traditional banking.
Furthermore, the Hong Kong dollar’s peg to the USD highlights how stablecoins can leverage existing financial systems. This could potentially increase adoption in USD-aligned markets.
Ultimately, stablecoins may not replace fiat but could coexist as a complementary system. Their ability to facilitate cross-border transactions with minimal fees and instant settlement positions them as a transformative force in global finance.
As adoption grows, stablecoins could redefine monetary systems, particularly in DeFi and Web3 ecosystems.
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What Could Be the Worth of the Stablecoin Market in the Future?
The stablecoin market has already ballooned to over $250 billion in 2025. Tether’s dominance, with a 61% market share, underscores the sector’s growth, while USDe’s rapid ascent signals rising demand for innovative stablecoin models.
Analysts predict continued expansion, driven by increasing crypto adoption and institutional interest. For instance, Ethena’s $100 million funding round, backed by Franklin Templeton, Panthera Capital, and PolyChain Capital, reflects confidence in synthetic stablecoins.
According to the Citi Institute, the stablecoin market could be worth an average of $1.6 trillion, a minimum of $500 billion, and a maximum of $3.7 trillion by 2030. This metric could be fuelled by DeFi’s growth and integration into mainstream platforms like Telegram.
Emerging markets, where fiat instability is prevalent like developing economies, may drive significant demand.
However, regulatory clarity will be pivotal. Stricter rules, like those in the EU, could temper growth, while favoured policies in crypto-friendly regions could accelerate it.
Additionally, innovations like Ethena’s USDtb, backed by BlackRock’s BUIDL fund, suggest that tokenised assets will further diversify the market.
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Conclusion: Should You Consider Using the Ethena USDe Stablecoin?
In conclusion, Ethena’s USDe has carved a significant niche as the third-largest stablecoin, leveraging innovative strategies and strategic partnerships.
While regulatory and competitive challenges persist, its growth trajectory demonstrates the potential to transform stablecoins.
As the market evolves, stablecoins could redefine global finance, complementing fiat currencies and driving a new era of decentralised financial systems.
With the rise in demand for the asset class, you can see that the future of stablecoins is bright, with USDe at the forefront of this revolution.
