Related Articles
Improved Content:
Forget rate hikes – could stablecoins be the secret weapon against inflation? Federal Reserve Governor Stephen Miran suggests a surge in US dollarbacked crypto could actuallylowerinterest rates. Is this the unconventional economic lever we’ve been waiting for?
At the BCVC summit in New York, a Trump appointee, Miran, dropped a bombshell: Dollar-pegged crypto tokens might be quietly sabotaging the “neutral rate,” or r-star – that delicate economic sweet spot where growth hums without overheating. Are stablecoins secretly destabilizing the economy?
If the neutral rate drops, then the central bank would also react by dropping its interest rate, he said.
Stablecoins: a $310.7 million blip today, a $3 trillion tidal wave tomorrow? CoinGecko’s numbers paint the current picture, but Fed research hints at a potential 10x market explosion within five years.
Stephen Miran speaking at a conference in New York on Friday. Source: BCVC
“Forget Bitcoin. The real silent revolution is happening in stablecoins. My research shows they’re quietly driving up global demand for U.S. Treasury bills and other dollar-denominated assets. And this is just the beginning.”
“Stablecoins may become a multitrillion-dollar elephant in the room for central bankers.”
Stablecoins: friend or foe? The IMF and other financial watchdogs are raising red flags, fearing these digital assets could steal the spotlight from traditional banking. Picture this: stablecoins offering juicy yields, luring customers away from established banks. US banking groups are practically begging Congress to step in, worried that lax oversight could turn the banking landscape upside down. Are stablecoins the future of finance, or a ticking time bomb?
Related: How TradFi banks are advancing new stablecoin models
Regulation to pave the way
Miran championed the GENIUS Act in his address, highlighting its clear consumer safeguards. He suggested the regulatory clarity it provides will be instrumental in unlocking widespread stablecoin adoption.
“Color me surprised, but I’m actually applauding the GENIUS Act. Usually, I eye new regulations with suspicion. However, this framework for stablecoins? It’s a game changer. It erects guardrails of legitimacy and accountability, finally treating these digital dollars with the seriousness they deserve, putting them on par with traditional greenbacks.”
The GENIUS Act could revolutionize monetary policy, thanks to its pivotal requirement: U.S. companies issuing digital assets must hold rock-solid, dollar-denominated reserves, matching the value of their assets, dollar for dollar. This one-to-one backing, using only the safest and most readily available U.S. dollars, promises a new era of stability in the digital economy.
Magazine: Bitcoin’s ‘speed bump’ to $56K? Ripple rejects IPO plans: Hodler’s Digest, Nov. 2 – 8
Thanks for reading Stablecoin demand is growing and it can push down interest rates: Fed’s Miran
