Federal Reserve Member Warns of Stablecoins’ Impact on Monetary Policy

The increasing demand for dollar-pegged “stablecoins” could lead to a reduction in the key interest rate, according to Federal Reserve Board member Fed Steven Miran, speaking at the BCVC summit in New York.

According to him, stablecoins increase foreign buyers’ interest in U.S. Treasury bonds and other dollar liquid assets. The official referred to these assets as a “multi-trillion-dollar elephant in the room for central banks.”
At the time of writing, the capitalization of the “stablecoins” sector stands at $311 billion. The Fed forecasts this figure to grow to $3 trillion over the next five years, Miran stated.



The Fed representative praised the GENIUS Act, signed by U.S. President Donald Trump in July. The document imposes requirements on stablecoin issuers and establishes clear regulatory frameworks for their activities in the United States.

“While I am usually skeptical of new initiatives, [the GENIUS Act] is very encouraging. It establishes legitimacy and accountability comparable to the standards for traditional dollar assets,” commented Miran.

The official noted that “stablecoins” should be fully backed by liquid assets at a 1:1 ratio. According to him, this requirement is crucial from a monetary policy perspective.
Back in October, Multicoin Capital co-founder Tushar Jain warned that U.S. banks could lose $6.6 trillion due to the GENIUS Act. He stated that the legislation would lead to a massive outflow of deposits from traditional structures into more profitable stablecoins.