Fed’s Stephen Miran Says Stablecoin Growth Could Lower Interest Rates
According to Federal Reserve Governor Stephen Miran the growing demand for stablecoins cryptocurrencies linked to the US dollar...
Quick overview
- Federal Reserve Governor Stephen Miran suggests that the rising demand for dollar-backed stablecoins could lead to a decline in US interest rates.
- Miran highlights that stablecoins may increase global demand for U.S. Treasury bills, potentially lowering the neutral interest rate.
- He supports the GENIUS Act, which aims to provide clearer regulations for stablecoin issuers, enhancing their legitimacy in the financial system.
- The growth of stablecoins could lower borrowing costs and improve access to credit, fundamentally changing the financial landscape.
According to Federal Reserve Governor Stephen Miran the growing demand for stablecoins cryptocurrencies linked to the US dollar may contribute to a decline in US interest rates in the coming years. Speaking at the BCVC Summit in New York Miran clarified that the increasing use of dollar-backed stablecoins might raise demand for U.S. Treasury bills and other liquid dollar assets globally hence lowering the “neutral” interest rate that directs central bank policy.
Federal Reserve Governor Stephen Miran says the growth of stablecoins could over time put substantial downward pressure on the neutral interest rate.
He speaks during an event at the Harvard Club of New York City https://t.co/r8ASJt1YEi pic.twitter.com/zjbrqliDJ5
— Bloomberg TV (@BloombergTV) November 7, 2025
What Miran Said About Stablecoins and Interest Rates
Stablecoins could play a significant role in global banking in the near future, claims Miran. He described them as a possible “multitrillion-dollar elephant in the room” that central bankers might encounter. The neutral rate, often known as the r-star, is the interest rate that neither accelerates nor decelerates the economy.
In order to prevent too tightening financial conditions the Federal Reserve may need to drop its own policy rate if stablecoins push this rate down.
“Stablecoins are already increasing demand by buyers outside the United States for U.S. Treasury bills and other dollar-denominated liquid assets,” Miran stated. “This demand will keep rising.”
Even conservative estimates, said Miran shows that the stablecoin market may increase from $310 billion to $3 trillion in five years. The financial markets would see an increase in liquidity as a result of this expansion, which would also lower borrowing costs overall.
Support for the GENIUS Act
Miran commended the recently proposed GENIUS Act which provides stablecoin issuers in the United States with more precise restrictions. According to the statute issuers must maintain 1-to-1 reserves in secure liquid U.S. dollar assets like Treasury bills.
The GENIUS Act is a momentous turning point for the future of digital dollars.
Our response to @USTreasury’s request for public comment on this historic law’s implementation outlines recommendations to deliver a uniform, prudentially sound framework for U.S. dollar payment… pic.twitter.com/7UmRJLWvrM
— Circle (@circle) November 6, 2025
“The GENIUS Act greatly encourages me, even though I tend to view new regulations with skepticism,” he stated. “Stablecoins now have the same legitimacy and accountability as traditional dollar assets.”
He went on to say that regulatory certainty might help integrate stablecoins into the global financial system without causing instability by making them safer and more popular.
Possible Effects on the Economy
According to Miran’s remarks the emergence of stablecoins may fundamentally reduce borrowing costs both domestically and internationally. Stablecoins efficiently increase loanable funds the amount of money available for lending by increasing demand for dollar assets.
Miran stated that in order to promote a healthy economy policy rates should likewise be lower if the neutral rate is lower. “It would be contractionary if the central bank did not lower interest rates in response.”
This implies that if the Federal Reserve modifies its policies appropriately, the adoption of stablecoins may eventually result in more affordable loans reduced mortgage rates and better access to credit.
Corporate and Global Adoption Rising
Stablecoins are growing in popularity among corporate treasuries and fintech companies in addition to individual consumers. According to a recent analysis by TRM Labs the majority of stablecoin payments which totaled $6.4 billion in the first half of this year came from B2B transfers.
Stablecoins provide quick international payments for big businesses without the hassles or costs associated with conventional banking systems like SWIFT. Companies can transfer money between contractors, suppliers and subsidiaries in a matter of seconds which enhances cash management and liquidity.
Outlook for the Future
This change in functioning demonstrates how stablecoins are developing from speculative cryptocurrency instruments into actual financial infrastructure influencing the flow of money around the world.
Stablecoins have the potential to become a major component of the financial system with the help of legislators like Miran and more transparent laws like the GENIUS Act. Their growth may have an impact on how money is valued, stored and moved as well as how central banks determine interest rates in the digital era.
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