Federal Reserve Governor Stephen Miran predicted that the expansion of dollar-denominated stablecoins could reduce U.S. interest rates, particularly the neutral rate (r-star), by channeling massive flows into Treasury bills and other liquid assets. Presented in his Nov. 7 remarks in New York, the forecast signals a potential structural shift in the transmission of monetary policy affecting issuers, banks, and debt markets. According to Fed staff projections, the stablecoin ecosystem could reach $1–$3 trillion by the end of the decade.
Miran noted that stablecoins could scale to between $1 and $3 trillion by 2030, a trajectory that would require issuers to hold substantial reserves in safe assets, mainly short-term Treasury bills. He emphasized that this reserve model is integral to dollar-denominated stablecoins and central to their growing integration with traditional markets.
That additional demand for Treasury bills tends to raise bond prices and lower yields, a dynamic that can pull global benchmark rates down and reduce the neutral rate. According to cited estimates, the effect could lower rates by up to 40 basis points (0.40%) in strong-adoption scenarios.
The governor linked this mechanism to the new GENIUS Act, which requires stablecoin providers to hold reserves in cash or Treasury securities. He argued that the law formalizes demand for those assets and, paradoxically, accelerates the flow of liquidity into the public debt market.
“My thesis is that stablecoins are already increasing demand for Treasury bills and other dollar-denominated liquid assets,” Miran said, noting that the magnitude of growth raises open questions about deposit substitution and withdrawal risks. Technical definition: r-star (neutral rate) is the interest rate that neither stimulates nor restricts economic activity when the economy is operating at its potential.
Federal Reserve and stablecoins market
Miran’s argument implies shifts in the stance of monetary policy, greater influence of private actors on demand for public debt, and potential liquidity strains if stablecoin issuance accelerates from abroad. These forces could shape how policy is calibrated as stablecoins expand and integrate with funding markets.
For banks, the substitution of deposits by assets linked to stablecoins could reduce intermediation capacity; for investors, the likely effect is a compression of short-term yields as demand concentrates in Treasury bills and other liquid instruments.
Miran, appointed by President Trump and known for advocating aggressive rate cuts, is preparing his departure from the Fed in January; his warnings leave a near-term milestone for the debate over how to integrate the stablecoin revolution into monetary policy formulation. Related: Governor Miran, Nov. 7 speech on stablecoins and monetary policy.
