Key facts
- Dollar-denominated stablecoins could strengthen the US dollar's global dominance, according to Bank of England official Carolyn Wilkins.
- Stablecoins could increase demand for US Treasurys by making cross-border settlement easier and expanding access to dollar-linked assets.
- Tether and Circle held nearly $150 billion in Treasury bills at the end of 2025, according to data cited by Wilkins.
- Mass stablecoin redemptions could force issuers to sell Treasury bills, potentially amplifying market volatility, Wilkins said.
- The stablecoin market is valued at over $300 billion, with 98% tied to the US dollar.
The growing market for stablecoins could reinforce the US dollar's global dominance and increase demand for US Treasurys, according to Carolyn Wilkins, a member of the Bank of England’s Financial Policy Committee. In a speech at Queen’s University Belfast, Wilkins stated that dollar-denominated stablecoins could strengthen the greenback by facilitating easier cross-border settlements and expanding access to dollar-linked assets outside the US.
Wilkins noted that large stablecoin issuers are already significant buyers of US government debt. Data cited by Wilkins indicated that Tether's USDt and Circle's USDC held nearly $150 billion in Treasury bills at the end of 2025, having purchased approximately $33 billion during that year. However, she also cautioned that the relationship is reciprocal: at sufficient scale, mass stablecoin redemptions could compel issuers to sell Treasury bills, potentially exacerbating volatility in stressed markets.
The overall stablecoin market has surpassed $300 billion in circulation, with the US dollar accounting for 98% of its value, giving the currency a significant first-mover advantage, Wilkins said. In contrast, British pound-denominated stablecoins have seen slower adoption, despite UK regulators' efforts to encourage their development through regulatory sandboxes and finalized issuance rules.