New Delhi, July 13 -- NEW YORK - The stablecoin market registered its steepest single-month contraction since the Terra-Luna collapse four years ago, losing $7.7 billion in June alone and more than $10 billion since May, data from CoinDesk showed Saturday.

Tether, the world's largest stablecoin by market capitalization, shrank from roughly $190 billion to $184 billion. Circle's USDC, the second-largest and the dominant token in regulated financial markets, fell from $80 billion to $73 billion. Together, the two most-used dollar proxies in crypto shed about $13 billion over the two-month stretch.

Paul Howard, head of trading at Wincent, a digital-asset firm, said the reading should be kept in context. Regulated newcomers are filling part...