Fed Governor Highlights Stablecoins’ Potential Impact on Neutral Interest Rates

Federal Reserve Governor Stephen Miran has signaled that the growing global demand for dollar-pegged stablecoins could influence long-term U.S. interest rate policy. Speaking at the BCVC Summit 2025 in New York, Miran noted that increased adoption of these digital assets may drive higher demand for U.S. Treasuries, potentially lowering borrowing costs and forcing a reevaluation of the neutral rate (r*).

Stablecoins, particularly those tied to the U.S. dollar, are seeing surging use in regions with limited banking access or volatile local currencies. Tether maintains its market dominance as the sector rebounds past $300 billion in valuation, with applications spanning decentralized finance, cross-border payments, and trading.

"This international demand could reshape dollar flow dynamics," Miran observed, suggesting stablecoins might eventually become a "multitrillion-dollar elephant in the room" for central bankers. The remarks underscore how cryptocurrency innovations are increasingly intersecting with traditional monetary policy frameworks.