Federal Reserve officials brace for a new financial era as stablecoin demand—projected to reach up to $3 trillion—creates unprecedented pressure on Treasury markets and dollar liquidity.
The U.S. Federal Reserve may soon have to adjust its monetary policy to account for the explosive rise of stablecoins, according to Federal Reserve Governor Stephen Miran. Speaking at the BCVC Summit 2025 in New York, Miran cautioned that digital dollar-tied assets could reshape global liquidity flows, forcing the Fed to adapt as adoption accelerates worldwide.
“Stablecoins may become a multitrillion-dollar elephant in the room for central bankers,” Miran said. Fed staff projections estimate uptake reaching between $1 trillion and $3 trillion by the end of the decade — a scale that would have major implications for U.S. Treasury demand and monetary stability.
The Scale of the Stablecoin Shift
Currently, around $7 trillion in Treasury bills are outstanding. Miran warned that if stablecoin issuers increasingly purchase these assets to back their tokens, the additional demand could meaningfully distort short-term funding markets.
“The magnitude of additional demand from stablecoins will be too large to ignore,” he emphasized. Stablecoins like Tether’s USDT and Circle’s USDC have already become vital to global crypto trading, but Miran suggests their broader adoption—especially overseas—could tighten dollar liquidity and amplify the dollar’s strength.
Impact on the U.S. Dollar and Global Markets
“If a global stablecoin glut is driven by flows out of foreign currencies and into the U.S. dollar, it will, all else equal, make the dollar stronger,” Miran said. He noted that such effects could force the Fed to respond depending on how they interact with its price stability and employment mandates.
The Guiding and Establishing National Innovation for U.S. Stablecoins Act (GENIUS Act), recently enacted, sets the framework for stablecoin regulation but does not permit interest-bearing products, reducing fears of a drain on traditional bank deposits.
Miran, who previously served in the Trump administration, also argued that the U.S. financial system “could use a reboot”, hinting that blockchain-based payment rails might modernize outdated infrastructure. “Stablecoins may well lead the way, facilitating dollar holdings and payments domestically and abroad,” he added.
Experts view Miran’s remarks as a sign of growing recognition inside the Fed that stablecoins are no longer a niche crypto product but a structural force in global finance. As stablecoin circulation surges toward trillions, the line between monetary innovation and policy disruption is becoming increasingly thin — and the Fed is now on alert.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.