Impact of Dollar Stablecoins: Carolyn Wilkins, a member of the Bank of England's Financial Policy Committee, stated in a speech at Queen’s University Belfast that dollar-backed stablecoins can strengthen the global dominance of the U.S. dollar and increase the demand for U.S. Treasuries.
Massive Holdings: Wilkins noted that Tether's USDT and Circle's USDC held nearly $150 billion in U.S. Treasuries by the end of 2025, purchasing about $33 billion over the course of the year.
Potential Market Volatility: She warned that large-scale stablecoin redemptions could force issuers to sell Treasuries, which would amplify market volatility.
Current Market Scale: Total stablecoin circulation has exceeded $300 billion, with 98% of its value pegged to the U.S. dollar, giving it a significant first-mover advantage beyond just the crypto sector.
UK's Progress: Sterling stablecoin development has moved slower, but the U.K. Financial Conduct Authority (FCA) has tested potential issuers using a regulatory sandbox, and the Bank of England has explored using stablecoins alongside a simulated digital pound for cross-border trade.
Massive Holdings: Wilkins noted that Tether's USDT and Circle's USDC held nearly $150 billion in U.S. Treasuries by the end of 2025, purchasing about $33 billion over the course of the year.
Potential Market Volatility: She warned that large-scale stablecoin redemptions could force issuers to sell Treasuries, which would amplify market volatility.
Current Market Scale: Total stablecoin circulation has exceeded $300 billion, with 98% of its value pegged to the U.S. dollar, giving it a significant first-mover advantage beyond just the crypto sector.
UK's Progress: Sterling stablecoin development has moved slower, but the U.K. Financial Conduct Authority (FCA) has tested potential issuers using a regulatory sandbox, and the Bank of England has explored using stablecoins alongside a simulated digital pound for cross-border trade.