Fed Warns $3T Stablecoins by 2030 Could Lower Rates
Federal Reserve Governor Stephen Miran warned that stablecoins, currently at $310.7 billion market cap, could grow to $1–3 trillion by 2030. He said rising stablecoin adoption will push issuers to hold reserves in US Treasuries and other liquid assets. The proposed GENIUS Act mandates one-to-one reserve backing in safe US assets and bans yield offerings to limit bank deposit outflows. This surge in demand for Treasuries may lower the neutral interest rate (r-star) and influence Fed policy. Miran noted stablecoins are already boosting global demand for dollar assets, especially in regions lacking access to dollar savings. Major issuers like Tether (USDT) and Circle (USDC) will be regulated under the new framework, with backing from banking groups and the IMF. International coordination is crucial as platforms like Ethereum (ETH) and Solana (SOL) host significant stablecoin volumes. Traders should monitor stablecoin regulation and US Treasury yields for changes in borrowing costs and market liquidity.
Neutral
While the GENIUS Act and Fed warnings signal increased regulatory oversight and heightened demand for US Treasuries, stablecoins remain pegged to the dollar, so direct price changes are unlikely. In the short term, traders may see shifts in liquidity and Treasury yields as issuers adjust reserve holdings, potentially impacting borrowing costs across crypto markets. Over the long term, clear one-to-one reserve rules and support from institutions like the IMF can boost confidence and adoption of stablecoins, reinforcing market stability. Overall, regulatory clarity reduces uncertainty but does not alter the USD peg of stablecoins, resulting in a neutral market impact.