Briefing
Stablecoins and the Demand for Dollars
Abstract: Whether stablecoins threaten or reinforce the dollar's global role depends critically on how they are backed: Reserve-backed stablecoins increase demand for U.S. Treasuries, while crypto-backed ones reduce it. As stablecoin adoption broadens, investors place greater weight on safety and liquidity, making reserve-backed issuance dominant in the long run and putting downward pressure on the natural rate of interest. What initially appears to be a challenge to the dollar can — under plausible institutional arrangements, such as those required by the GENIUS Act — become a force that strengthens it.
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https://www.richmondfed.org/publications/research/economic_brief/2026/eb_26-10
Description: Briefing
Bibliographic Information
Provider: Federal Reserve Bank of Richmond
Part of Series: Richmond Fed Economic Brief
Publication Date: 2026-03-25
Volume: 26
Issue: 10