U.S. Federal Reserve Governor Stephen Miran has stated that the rapid rise of dollar-backed stablecoins could become a major factor influencing future U.S. monetary policy and interest rate decisions.
Speaking at the BCVC Summit 2025 at the Harvard Club in New York on November 7, Miran emphasized that the global appetite for digital dollars is reshaping financial flows and could exert downward pressure on the neutral rate of interest, known as r⁎.
Stablecoins as a Growing Financial Landscape
In his remarks, Miran described stablecoins as an “established and fast-growing part of the financial landscape,” noting that they have evolved from niche crypto tools into key instruments for payments and savings worldwide.
He argued that their success reflects both persistent global demand for the U.S. dollar and the efficiency of blockchain-based payment rails that allow cross-border transactions at lower cost.
Impact on U.S. Treasury Markets and Interest Rates
According to Miran, the surge in stablecoin adoption, driven by users seeking access to stable, dollar-denominated assets, has already increased demand for U.S. Treasury bills and other liquid dollar-denominated securities.
He said that this effectively expands the supply of loanable funds and could lower U.S. borrowing costs. He warned that, if current growth trends persist, stablecoins “may become a multitrillion-dollar elephant in the room for central bankers.”
Regulatory Developments: The GENIUS Act
The Fed governor also highlighted the GENIUS Act (Guiding and Establishing National Innovation for U.S. Stablecoins Act), passed earlier this year, as a turning point for regulation.
The law requires U.S.-based issuers to hold reserves fully backed by safe, dollar-denominated assets such as Treasury bills, repos, or money market funds, adding both legitimacy and stability to the sector.
Broader Implications and Future Considerations
Miran concluded that while stablecoins bring efficiency and inclusion, especially in emerging economies with restricted access to dollar assets, they also warrant close study for potential impacts on bank intermediation, global liquidity, and the transmission of monetary policy.
As adoption accelerates, the Federal Reserve, he said, must account for stablecoins as a “new force shaping the future of U.S. finance.”