United States Federal Reserve Governor, Stephen I. Miran calls Stablecoins a force that will lower interest rates, citing growing foreign demand for USD.
Speaking on stablecoins At the BCVC Summit 2025, Harvard Club of New York City, Miran described stablecoins as a fast-growing part of the financial landscape, whose growth comes as no surprise, as demand for United States dollars remains strong.
As a nominee of President Donald Trump, Stephen I. Miran was sworn in on Tuesday, September 16 and has revealed being encouraged by the passing of the Genius Act, the first comprehensive federal regulatory framework for payment stablecoins.
Miran said that the law establishes a level of legitimacy and accountability congruent with holding traditional dollar assets, highlighting that the Act may constitute new loanable funds in the U.S. economy or the overall amount of money available for borrowing and lending.
Stablecoins & U.S. monetary policy
The stablecoin market is valued at $313.77 billion today, data from coinmarketcap.com shows. In Miran's speech, it is reveal that the Federal Reserve staff roughly projects stablecoin uptake reaching between $1 trillion and $3 trillion by the end of the decade, the Fed governor added that the magnitude of additional demand from stablecoins will be too large to ignore.
Miran believes that stablecoins contribute to the dollar's dominance by allowing an ever-growing share of people around the globe to hold assets and conduct transactions in the most trusted currency.
He added that the innovations of public blockchains and advancement of payments through stablecoins represent potentially transformational change for consumers and businesses outside the U.S., particularly those in emerging market economies (EMEs) or even advanced foreign economies (AFEs) with burdensome restrictions on their payment systems, citing the flexibility of stablecoins trade rails, allowing anyone in the world to use.
Miran argued that growing stablecoin use will introduce downward pressure on neutral rates (r *), he added that even a relatively conservative estimates of stablecoin growth imply an increase in the net supply of loanable funds in the economy that pushes down r *.
The Fed governor said that If r* is lower, policy should also be lower than they would otherwise be to support a healthy economy and that failure of the central bank to cut rates in response to a reduction in r* is contractionary.
Miran concluded saying that the United States financial infrastructure, unlike its physical infrastructure, could use a reboot, suggesting that stablecoins could lead the way on this front, warning that it is imperative to consider what widespread adoption may mean for monetary policy, both in the U.S. and abroad.