The Trump-appointed official addressed the BCVC summit in New York on Friday, arguing that dollar-pegged crypto tokens are already increasing demand for U.S.
Stablecoin News
Federal Reserve research suggests the stablecoin market could reach $3 trillion in value over the next five years, up from its current $310.7 million valuation, according to U.S. Federal Reserve Governor Stephen Miran.
The Trump-appointed official addressed the BCVC summit in New York on Friday, arguing that dollar-pegged crypto tokens are already increasing demand for U.S. Treasury bills and other dollar-denominated liquid assets from purchasers outside the United States. This demand will continue growing, he stated.
Miran explained that if the neutral interest rate drops, the central bank would react by dropping its interest rate. The neutral rate, or r-star, represents the level that neither stimulates nor impedes the economy, and stablecoins could be putting downward pressure on this rate.
"Stablecoins may become a multitrillion-dollar elephant in the room for central bankers," Miran said during his speech. His thesis centers on the expanding role of stablecoins in creating sustained demand for U.S. financial instruments.
The GENIUS Act received praise from Miran for establishing clear guidelines and consumer protections, despite his typically skeptical view of new regulations. He indicated the regulatory framework will play a key role in spurring broader adoption of stablecoins.
"For the purposes of monetary policy, the most important aspect of the GENIUS Act is that it requires U.S.-domiciled issuers to maintain reserves backed on at least a one-to-one basis in safe and liquid U.S. dollar-denominated assets," Miran stated.
This regulatory apparatus for stablecoins establishes legitimacy and accountability congruent with holding traditional dollar assets, the Fed governor explained. The framework could prove crucial for integrating digital assets into mainstream financial policy discussions.
Organizations including the International Monetary Fund have warned that stablecoins pose a threat to traditional financial assets and services, as they could potentially compete for customers. U.S. banking groups have also urged Congress to tighten oversight of stablecoins with yield, arguing they could attract would-be bank users.
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