US Policy Needs To Catch Up To Growing Stablecoin Market: Fed

US Federal Reserve Governor Stephen Miran says that policy needs to catch up to the growing stablecoin market, which he predicted could grow to as much as $3 trillion by the end of the decade. 

“Stablecoins may become a multitrillion dollar elephant in the room for central bankers,” Miran, who is the newest member of the Fed’s board of governors after his recent confirmation, said in a speech.

“Based on the surveys that I’ve seen, the forecasts that I’ve seen, it’s a force to be reckoned with absolutely,” he said about the stablecoin market.

“The inter-quartile range of private-sector estimates compiled by Federal Reserve staff roughly projects stablecoin uptake reaching between $1 trillion and $3 trillion by the end of the decade,” he added. 

That predicted market cap range is substantially higher than the sector’s current capitalization, which stands at around $305.514 billion, according to data from DefiLlama.

Stablecoin market cap (Source: DefiLlama)

Miran did say that “stablecoin growth may not live up to the forecasts,” and cited potential yield and reward arrangements that could “limit adoption.” 

GENIUS Act Provides Industry With Regulatory Clarity

Miran’s prediction comes after US President Donald Trump signed the GENIUS Act into law earlier this year in July. The new Fed Governor said that as a result of this signing, “there is now a clear regulatory pathway in the US for stablecoins issuers to broaden their reach and solidify stablecoins as a core part of the payment system.” 

“I am encouraged that the Federal Reserve is taking steps to recognize the importance of stablecoins for the payment system,” he said. 

However, Miran added that “economic research has some catching up to do.” He also mentioned that there are a number of open questions that still need to be addressed. 

Those include questions around how many assets stablecoin issuers will manage, whether the funds will come from domestic or foreign sources, as well as what the systemic risks are that stablecoins present to the traditional finance system. 

Stablecoins Will Strengthen Dollar’s Global Dominance

Miran also said that stablecoins are contributing to the US dollar’s global dominance. Indeed, the largest stablecoins by market cap, such as Tether’s USDT which accounts for over 60% of the sector, are tokens pegged to the greenback.

Fastest growing stablecoins, based on 30d growth (%) in market cap.

One key takeaway:

The stablecoin market attracts both TradFi & crypto-native teams; many of them building on @ethereum. pic.twitter.com/epKfKxBTAI

— Token Terminal 📊 (@tokenterminal) November 6, 2025

“My thesis is that stablecoins are already increasing demand for US Treasury bills and other dollar-denominated liquid assets by purchasers outside the United States and that this demand will continue growing,” the Fed Governor said. 

He added that even stablecoins outside of the GENIUS Act’s jurisdiction “are likely to boost demand for Treasurys and other dollar-denominated assets.”

“Stablecoins that do not comply with the GENIUS Act can invest reserves in a much broader range of assets but, to be viewed as reliable stores of value, will likely end up still investing substantially in US dollar securities with minimal credit risk,” Miran explained.   

That increased demand will subsequently lower the borrowing cost for the US government as well, he added. 

In order for that stablecoin adoption to happen, however, Miran argued that there must be a bridge from local fiat currencies into stablecoins. 

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