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Cryptoprowl.com / The war in Iran is prompting investors to move more capital into U.S. dollar-pegged stablecoins.

Analysts say investors are seeking on-chain safety as geopolitical risks rise and financial markets grow more volatile.

As such, the total stablecoin market capitalization hit a record $313 billion U.S. on March 9, underscoring resilient demand as the broader cryptocurrency sector remains erratic.

Market data shows the combined value of stablecoins climbed 1.14% over the past week to reach an all-time high of $313 billion U.S.

The increase comes as the U.S.–Iran conflict intensifies and oil prices swing wildly, amplifying risk aversion among investors who are also seeking safety in U.S. fiat currency and gold.

Analysts say that investors often treat stablecoins as both a parking lot for liquidity and a bridge between fiat currencies and crypto.

Tether's USDT (CRYPTO: $USDT ) stablecoin remains the largest in the world and accounts for about 62.5% of the market, with a supply of roughly $183.5 billion U.S. currently in circulation.

Circle's (NYSE: $CRCL ) USDC (CRYPTO: $USDC ) stablecoin holds the second-largest share of the market at 25.5%. Both stablecoins are playing a bigger role in payments and on-chain settlements.

However, there are a number of newer entrants in the stablecoin space. These include PayPal USD (CRYPTO: $PYUSD ), launched last year. PayPal's (NASDAQ: $PYPL ) stablecoin now has a 1.4% market share.

Stablecoins are cryptocurrencies whose value is pegged to another asset, typically the U.S. dollar or price of gold.