Stablecoins could boost US dollar and Treasury demand: BoE
Dollar stablecoins have grown to about $300 billion in circulation, prompting a Bank of England policymaker to warn that their expansion could increase demand for US Treasurys while creating new risks during periods of heavy redemptions. Stablecoins could extend the dollar into new markets The Bank of England said in a Sep. 15 speech that stablecoins could reinforce the US dollars international role by making dollar-linked assets and settlement systems easier to access outside the United States. Carolyn Wilkins, an external member of the central bank‘s Financial Policy Committee, told an audience at Queen’s University Belfast that dollar stablecoins already have a “considerable first-mover advantage.” About 98% of stablecoin value is denominated in dollars, according to figures cited in her speech. Stablecoins in circulation reached roughly $300 billion by mid-2026, compared with less than $5 billion at the beginning of 2020. Although most activity still involves crypto trading, lending, collateral, and market liquidity, Wilkins said the tokens could move deeper into payments and international finance. Cross-border settlement forms one channel for that expansion. Stablecoin transfers can operate around the clock and move between countries without passing through every institution in a traditional correspondent banking network. Research cited by Wilkins found that such systems could lower costs
