Waller: Dollar Stablecoins Can Export U.S. Monetary Policy

Federal Reserve Governor Christopher Waller told attendees at the 32nd Dubrovnik Economics Conference in Croatia that dollar-backed stablecoins can cause countries that use them to import U.S. monetary conditions. He said, “Countries that adopt it, it’s like a fixed exchange rate system. You are going to import US monetary costs, so it’s broadening the reach of US monetary policy in countries that use more stablecoins.”

Waller explained that when many people hold tokens pegged to the dollar instead of local currency, their savings, payments and borrowing move in dollar terms. That alignment can make interest rates, inflation outcomes and credit conditions for those users more directly tied to Federal Reserve policy than to domestic central bank decisions. Economists and regulators have reported this pattern in countries with higher stablecoin use, including Argentina, Brazil, Turkey and Nigeria, where residents use dollar-denominated tokens to preserve value during currency weakness.

At the conference Waller described stablecoins as a payments innovation and a source of competition in existing payment systems, saying, “I’ve always just looked at stablecoins as a payment instrument; there’s nothing evil about it, nothing dangerous about it. They are just bringing competition into the payments world.” He also questioned the need for central bank digital currencies, calling a CBDC “a solution in search of a problem.”

The remarks coincided with several major developments in the U.S. stablecoin market and policy. SoFiUSD launched as a national bank-issued stablecoin. The stablecoin market reached a record size of about $322 billion. In Congress, the GENIUS Act and the CLARITY Act continued moving through the legislative process; those bills would create a licensing framework for payment stablecoins and a broader market structure for digital assets. The Federal Deposit Insurance Corporation proposed anti-money-laundering and sanctions standards for stablecoin issuers.

Other central banks are pursuing different approaches. The European Central Bank is developing a digital euro, with a pilot phase planned and a target rollout in the coming years, citing concerns about payments infrastructure and currency use. The Bank for International Settlements has warned that dollar-linked tokens can enable capital flight and increase currency depreciation pressure in emerging markets.

Industry participants at a recent conference projected substantial growth for payment-focused stablecoins, with one executive forecasting the market could expand substantially by 2031. Lawmakers and regulators are considering how legislation and oversight will shape the size and compliance framework of dollar-backed stablecoins. Waller has previously called for clear rules to govern the tokens, and his Dubrovnik remarks placed the issue of cross-border monetary effects at the center of current policy debates.