Bank of England Official Says Dollar Stablecoins May Enhance Dollar Dominance

Carolyn Wilkins, a member of the Bank of England's Monetary Policy Committee, stated that the growth of dollar stablecoins could reinforce the global dominance of the dollar and increase the demand for U.S. Treasury bonds. In a speech at Queen's University Belfast, she pointed out that dollar stablecoins facilitate cross-border settlements and expand access to dollar-denominated assets outside the U.S. As of the end of 2025, stablecoin issuers Tether's USDT and fintech company Circle's USDC are expected to hold nearly $150 billion in U.S. Treasury bonds and purchase about $33 billion that year. Wilkins noted that large-scale redemptions of stablecoins could force issuers to sell Treasury bonds, thereby amplifying volatility in pressured markets. Currently, the total circulation of stablecoins has exceeded $300 billion, with 98% of their value pegged to the dollar. Wilkins stated that this gives the dollar a significant first-mover advantage, and the development of the stablecoin market has impacts that extend beyond the cryptocurrency sector. The development of pound stablecoins has been relatively slow, with the UK's Financial Conduct Authority testing potential issuers through a dedicated regulatory sandbox and finalizing the UK's stablecoin issuance rules in June; the Bank of England has also tested the feasibility of using stablecoins in conjunction with a simulated digital pound for cross-border trade payments.

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