Overview
- The Federal Reserve highlighted private estimates projecting stablecoin supply at roughly $1–$3 trillion by 2030, a scale significant relative to the sub-$7 trillion Treasury bill market and comparable to past $3 trillion QE purchases.
- Fed remarks said stablecoins are already boosting demand for U.S. Treasury bills and could push down the neutral interest rate, with implications that include a greater risk of hitting the zero lower bound and potential dollar strength.
- U.S. law under the GENIUS Act now requires U.S.-domiciled payment stablecoins to hold one-to-one reserves in safe, liquid dollar assets, and the Fed noted non-U.S. issuers also tend to hold low-credit-risk dollar securities.
- The Fed expects most new demand to come from jurisdictions with limited access to dollar assets, and it sees little incentive for broad U.S. deposit flight because stablecoins generally lack yield and federal insurance.
- Analysts warn of financial stability risks in emerging markets, including Standard Chartered’s estimate of up to $1 trillion in deposit outflows by 2028 and concerns over 24/7 digital capital flight, even as stablecoins expand dollar access and lower remittance costs.