Stablecoin growth could boost dollar dominance, US Treasury demand: BoE official
Carolyn Wilkins of the Bank of England said dollar-backed stablecoins could strengthen the US dollar’s global role by making cross-border payments easier, widening access to dollar assets abroad, and boosting demand for US Treasurys held as reserves. She noted that major issuers like Tether and Circle already hold large amounts of Treasury bills, but warned that rapid, large-scale redemptions could also force fire sales of Treasurys and add volatility in stressed markets. With more than $300 billion in stablecoins outstanding and 98% tied to the dollar, Wilkins said the dollar has a strong first-mover advantage. In the UK, pound stablecoins lag but regulators are trying to support them through a sandbox, new issuance rules, and central bank testing of digital money for cross-border payments.
