BoE official warns that stablecoins may reinforce dollar dominance and increase demand for U.S. Treasuries.

ME News reports that on September 16 (UTC+8), Carolyn Wilkins, a member of the Bank of England’s Financial Policy Committee, stated that the growth of USD-backed stablecoins could reinforce the U.S. dollar’s global dominance and increase demand for U.S. Treasury securities. Speaking at Queen’s University Belfast, she noted that USD stablecoins can facilitate cross-border settlements and expand access to dollar-denominated assets outside the United States. As of the end of 2025, Tether’s USDT and Circle’s USDC, issued by fintech companies, held nearly $150 billion in U.S. Treasury securities and purchased approximately $33 billion in Treasuries that year. Wilkins warned that large-scale redemptions of stablecoins could force issuers to sell Treasuries, thereby amplifying volatility in stressed markets. The total circulating supply of stablecoins has now exceeded $300 billion, with 98% of their value pegged to the U.S. dollar. Wilkins said this gives the dollar a significant first-mover advantage, and the impact of stablecoin market development extends beyond the cryptocurrency sector. The development of GBP-backed stablecoins has been relatively slower. The UK Financial Conduct Authority has tested potential issuers through a dedicated regulatory sandbox and finalized rules for UK stablecoin issuance in June. The Bank of England has also tested the feasibility of using stablecoins alongside a simulated digital pound for cross-border trade payments. (Source: ODAILY)