Fed Adds Stablecoins to Dollar Research Agenda

At the Fifth Conference on the International Roles of the Dollar on June 22–23, Fed Governor Christopher Waller framed distributed-ledger technologies and tokenized dollar assets, including stablecoins, as items for study as possible channels of global dollar intermediation. The Federal Reserve and the New York Fed organized the event around digital assets, payment rails, market structure and the dollar’s international uses.

Stablecoins are dollar-denominated tokens that can be held, transferred and redeemed across blockchains, exchanges and wallets. They differ from bank deposits and money-market-fund shares because they move on public ledgers and can be used directly for trading and payments.

Market measures cited at the time of the conference show large dollar-token activity. On June 25, two US dollar tokens ranked among the largest crypto assets by market capitalization, with one near $186 billion and another near $74 billion. One token reported 24-hour trading volume near $81 billion in a single snapshot, compared with roughly $43 billion for Bitcoin in that view. Circle reported its token in circulation at $74.3 billion on June 22 and said most of the reserve sits in an SEC-registered government money market fund managed by BlackRock.

How issuers back tokens affects other markets. If stablecoin reserves are held in bank deposits, money funds, repurchase agreements or short-term Treasury bills, changes in stablecoin demand can alter demand across those instruments. Fed researchers have noted that stablecoins combine balance-holding and payment functions on digital rails and can compete for transaction balances and payment flows. A separate Fed note described the deposit impact as conditional: stablecoin growth may reduce, recycle or restructure bank deposits depending on who holds tokens and how issuers manage reserves.

Central-bank research identified potential spillovers. A Bank for International Settlements working paper found that inflows into dollar-backed stablecoins can compress yields at short Treasury maturities, with stronger effects during market stress and as the sector grows. New York Fed staff research concluded that stablecoin activity can transmit liquidity stress to banks and complicate monetary-policy implementation. Treasury advisory material from 2026 estimated that major stablecoin issuers currently hold less than 1% of outstanding Treasuries but noted future offshore-driven growth could increase demand for short-end issuance.

Banks are taking steps in response. On June 5, The Clearing House announced a plan, backed by major banks, to build on-chain commercial-bank-money infrastructure that would link tokenized deposits to existing payment systems such as RTP and CHIPS. The project aims to move token activity into regulated bank balances while offering faster and programmable payments.

The Fed did not announce new regulation at the conference. Officials and researchers said they will continue to study stablecoin flows, reserve management, user composition and potential effects on repo, money funds and short-term Treasury markets.