Recently confirmed Federal Reserve Board member Stephan Millan pointed to the potential for stablecoins and their explosive growth, particularly from foreign users, to have a significant impact on monetary policy.
“Stablecoins have the potential to become a multi-trillion dollar elephant for central bankers,” Millan said in a speech in New York on Friday. He said Fed staff expects it to reach “$1 trillion to $3 trillion by the end of this decade.”
“Currently, outstanding Treasury bills total less than $7 trillion,” he said. “If these predictions prove accurate, the scale of additional demand from stablecoins will be too large to ignore.
Millan, who served as an economic official in President Donald Trump’s administration before joining the Fed, said he believes stablecoins are unlikely to become the drain on U.S. bank deposits that bankers are so concerned about, arguing that the new stablecoin law (the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act) does not directly allow yields.
“Thus, most of the demand for stablecoins will come from regions that don’t have access to dollar-denominated savings vehicles, and we expect demand for dollar assets to increase,” he said at the 2025 BCVC Summit.
“If the global stablecoin glut is caused by outflows of foreign currencies to the US dollar, then the dollar will appreciate, all else being equal,” Milan said. “Depending on the strength of this effect relative to other forces affecting the Fed’s price stability and maximum employment obligations, monetary policy may respond.”
Stablecoins are dollar-linked tokens that the crypto sector relies on as a stable component of transactions and contracts, and their issuers (such as Tether with USDT and Circle with USDC) will be newly regulated under the GENIUS Act, the first major crypto law enacted in the United States.
Milan, who remains on leave from his White House job as chairman of the Council of Economic Advisers, has argued that the U.S. financial infrastructure can be “rebooted” and suggested that dollar-backed tokens could provide that.
“Stablecoins have the potential to lead the way on this front, making it easier to hold and spend dollars domestically and internationally,” he said.