Fed Governor Warns of “Stablecoin Glut” Lowering U.S. Interest Rates

Governor Stephen I. Miran delivered a speech on 7 November 2025 titled “A Global Stablecoin Glut: Implications for Monetary Policy” at the BCVC Summit in New York. 

 He argued that dollar‑denominated stablecoins are rapidly moving from the fringes of crypto into a core part of the financial and payments infrastructure. 

Miran stressed that nearly all stablecoins today are denominated in U.S. dollars. Their rise creates two significant macro effects: increased demand for safe, dollar‑denominated liquid assets (such as U.S. Treasury bills) to back the reserves; and an expanded supply of “loanable funds” flowing into those assets. This, he says, could lead to a lower neutral interest rate (r*), meaning the Federal Reserve might need to set policy rates lower than otherwise to maintain a healthy economy. 

Miran estimates that stablecoin issuance could reach between $1 trillion and $3 trillion (or more) by the end of the decade. He suggests these flows might compress U.S. interest rates by roughly 30‑60 per cent of the effect seen during the earlier “global savings glut” era identified by former Fed Chair Ben S. Bernanke. 

The implications for the Bitcoin sector and broader sound‑money discourse are significant. A stronger role for stablecoins, especially dollar‑backed ones, reinforces the dominance of the U.S. dollar in cross‑border payments, potentially undermining de‑dollarisation narratives. It also raises questions about how digital money innovations will interact with Bitcoin’s free‑market attributes as participants reassess what constitutes money and monetary competition.

Miran also emphasised that although domestic U.S. uptake of yield‑bearing stablecoins may remain muted (especially under the GENIUS Act framework requiring one‑to‑one backing with liquid assets), emerging markets could drive much of the growth. 

In sum, Miran’s warning signals that stablecoins are not merely technical or niche innovations but may be a macro‑financial force requiring central‑bankers’ attention.

For Bitcoin proponents who emphasise monetary sovereignty and alternatives to dollar‑centred rails, this development may present both an opportunity and a challenge: opportunity in that digital monetary competition is rising; challenge in that the institutionalised dollar ecosystem may further entrench itself.