US Federal Reserve Governor Stephan Miran, the newest member of the board of governors after his recent confirmation, highlighted stablecoins and the potential that their explosive growth, especially by foreign users, will have serious consequences for monetary policy.
“Stablecoins can become a multibillion-dollar elephant in the central bankers’ room,” Miran said in a speech Friday in New York. He said Federal Reserve staff project that “absorption will reach between $1 trillion and $3 trillion by the end of the decade.”
“In total, there are less than $7 trillion in Treasury bills in circulation today,” he said. “If these forecasts prove accurate, the magnitude 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 Federal Reserve, said he believes stablecoins are unlikely to be the drain on U.S. bank deposits that bankers are so concerned about, arguing that the new stablecoin law, the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act, does not directly enable yield.
“Therefore, I expect most of the demand for stablecoins to come from places that cannot access dollar-denominated savings instruments, which will drive demand for dollar assets,” he said at the BCVC 2025 Summit.
“If a global stablecoin glut is driven by flows out of foreign currencies into the US dollar, all things being equal, the dollar will strengthen,” Miran said. “Depending on the strength of this effect relative to other forces affecting the Fed’s price stability and maximum employment mandates, that could be something that monetary policy reacts to.”
Stablecoins are the dollar-pegged tokens that the crypto sector relies on as a constant component of transactions and contracts, and their issuers, such as Tether with its USDT and Circle with its USDC, will recently be regulated under the GENIUS Act, which was the first major crypto law established in the US.
Miran, who remains on leave from his White House role as chairman of the Council of Economic Advisers, argued that the American financial infrastructure could use 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.
Read more: ECB says the use of US-backed stablecoins in the EU could weaken its monetary autonomy
