Governor Stephen Miran used a New York speech to cast regulated, fully-backed stablecoins as an emerging pillar of dollar payments with implications for Treasury demand, r* and global FX dynamics.
Stablecoins are “now an established and fast-growing part of the financial landscape,” according to Federal Reserve Governor Stephen Miran, who argued the new US regime will entrench them as a core rail for moving dollars.
Speaking on November 7 at the BCVC Summit at the Harvard Club of New York City, he tied the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act to a clearer route for issuance and integration.
Miran highlighted that the GENIUS Act requires US issuers to hold at least one-to-one reserves in safe, liquid dollar assets such as bank deposits, T-bills, repos and government money market funds.
That structure, he said, channels growing payments demand for stablecoins directly into Treasurys and other highly liquid instruments. Fed staff-compiled private estimates put potential uptake at $1–3 trillion by decade-end, a scale he described as “too large to ignore.”
On financial stability, he played down fears of deposit flight into payment tokens. “Because GENIUS Act payment stablecoins do not offer yield and are not backed by federal deposit insurance, I see little prospect of funds broadly fleeing the domestic banking system,” he said.
The “real opportunity” lies in meeting “untapped foreign appetite for dollar assets” where access is limited.
He drew an analogy to the early-2000s “global saving glut.” If foreign demand for dollar stablecoins reaches “$2 trillion” by decade-end, he said, it would “increase the current account deficit by roughly 1.2 percentage points of GDP,” or “about 30 percent of the size of the original global saving glut.” Under a more bullish “$4 trillion” scenario, the effect could reach “about 60 percent.”
“Since monetary policy must be forward looking, my colleagues and I would be best served exploring these topics now,” he said.
“These magnitudes would matter for monetary policy,” he said.
There could be exchange-rate effects too. “If a global stablecoin glut is driven by flows out of foreign currencies and into the U.S. dollar, it will, all else equal, make the dollar stronger,” he said. Greater dollarisation could also “reduce the benefits of floating exchange rates,” tightening global cycle synchronisation with US policy
He closed by urging the Fed to build scenarios that distinguish between domestic and foreign funding sources, reserve composition and run dynamics, noting that the projected magnitudes “would matter for monetary policy.”
