Stablecoin growth could boost dollar dominance, US Treasury demand

A Bank of England official said the growing use of dollarbacked stablecoins could support the US dollar’s global role and raise demand for US government debt. In a speech at Queen’s University Belfast on Tuesday, Carolyn Wilkins said stablecoins may make crossborder payments easier and broaden access to dollarlinked assets outside the United States. She added that this could increase the amount of Treasurys held by stablecoin issuers as reserves. Wilkins noted that major issuers such as Tether and Circle already hold large amounts of US Treasury bills. At the same time, she warned that largescale redemptions could require issuers to sell those holdings, which could add pressure to Treasury markets during periods of stress. The comments come as the stablecoin market continues to expand and remains heavily tied to the US dollar. Wilkins contrasted that trend with slower progress for pounddenominated stablecoins, even as UK regulators and the Bank of England continue testing and refining rules for digital money.