US Federal Reserve Governor Stephan Miran, the newest member of the board of governors after his recent confirmation, has shed light on stablecoins and the potential for their explosive growth – particularly by foreign users – to have serious consequences for monetary policy.
“Stablecoins could become a multi-trillion dollar elephant in the room of central bankers,” Miran said in a speech Friday in New York. He said Fed staff projects that “absorption will reach between $1 trillion and $3 trillion by the end of the decade.”
“In total, less than $7 trillion in Treasury bonds are in circulation today,” he said. “If these predictions prove accurate, the scale of additional demand for stablecoins will be too great to ignore.
Miran, who was an economic official in President Donald Trump’s administration before joining the Fed, said he thought it was unlikely that stablecoins would be a drain on U.S. bank deposits that bankers are deeply concerned about, arguing that the new stablecoin law – the Directing and Establishing National Innovation for Stablecoins in the United States (GENIUS) Act – does not directly enable yield.
“I therefore expect that most of the demand for stablecoins will come from regions unable to access dollar-denominated savings instruments, which will drive demand for dollar assets,” he said at the BCVC 2025 summit.
“If a global glut of stablecoins is caused by outflows of foreign currencies into the U.S. dollar, that will, all things being equal, make the dollar stronger,” Miran said. “Depending on the strength of this effect relative to other forces affecting the Fed’s price stability and maximum employment mandates, monetary policy could respond to this.”
Stablecoins are the dollar-pegged tokens that the crypto industry relies on as a constant component of transactions and contracts, and their issuers – such as Tether with its USDT and Circle with its USDC – are expected to be newly regulated by the GENIUS Act, which was the first major crypto law established in the United States.
Miran, who remains on leave from his White House post as chairman of the Council of Economic Advisers, claimed that America’s financial infrastructure would “need a reboot”, suggesting that dollar-backed tokens could provide it.
“Stablecoins may well lead the way on this front, facilitating dollar holdings and payments domestically and abroad,” he said.
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