Stablecoin growth could boost dollar dominance, US Treasury demand: BoE official
A Bank of England policy maker said digital dollars could expand access to the US currency while turning stablecoin issuers into bigger buyers of government debt.
A Bank of England policy maker said digital dollars could expand access to the US currency while turning stablecoin issuers into bigger buyers of government debt.
Carolyn Wilkins, a member of the Bank of England’s Financial Policy Committee, says the rise of stablecoins could reinforce the US dollar’s global dominance and increase demand for US Treasurys, underscoring how the growing market for digital dollars could have consequences well beyond crypto.
In a Tuesday speech at Queen’s University Belfast, Wilkins said dollar-denominated stablecoins could strengthen the greenback by making cross-border settlement easier, expanding access to dollar-linked assets outside the US and increasing demand for Treasurys held as reserves.
However, Wilkins argued that the relationship cuts both ways. At sufficient scale, mass stablecoin redemptions could force issuers to sell Treasury bills, potentially amplifying volatility in an already stressed market.