Federal Reserve Governor Stephen Miran has warned that the expanding use of stablecoins could have significant implications for U.S. monetary policy. Speaking at the BCVC Summit in New York, Miran said that demand for dollar-pegged tokens is increasing global appetite for U.S. Treasury securities and other liquid dollar assets.
He described these holdings as a “multi-trillion-dollar elephant in the room for central banks,” suggesting that stablecoins could indirectly lower key interest rates by boosting international demand for safe U.S. assets.
Stablecoin Market Set for Massive Growth
According to Miran, the total capitalization of the stablecoin sector has reached $311 billion. The Federal Reserve expects this figure to rise to $3 trillion within the next five years if current trends continue, highlighting the scale of potential monetary effects.
Miran also praised the GENIUS Act, signed into law by U.S. President Donald Trump in July, which introduces regulatory requirements for stablecoin issuers. The legislation establishes a framework for licensing and reserves, aiming to align stablecoin operations with standards applied to traditional dollar instruments.
“Although I’m usually skeptical of new initiatives, the GENIUS Act is very encouraging,” Miran said. “It provides legitimacy and accountability comparable to that of conventional dollar assets.”
He stressed that all stablecoins should be fully backed by liquid assets on a 1:1 basis, calling this principle “crucial for monetary policy stability.”
Industry Split Over Regulation
Not everyone in the digital asset sector shares Miran’s optimism. In October, Multicoin Capital co-founder Tushar Jain warned that U.S. banks could lose up to $6.6 trillion in deposits due to the GENIUS Act, as savers move funds from traditional accounts to higher-yielding stablecoins.
However, Faryar Shirzad, Coinbase’s Chief Policy Officer, dismissed such fears as “overstated”, arguing that regulatory clarity could instead strengthen confidence in the broader financial system.
The debate underscores the growing intersection between crypto innovation and central banking, with stablecoins increasingly viewed not merely as digital assets but as instruments shaping the global monetary landscape.