Federal Reserve Chairman Stephen Milan has made some notable remarks regarding the role of cryptocurrencies, and in particular stablecoins, in the global financial system.
In his remarks on the “Making Money” program, Milan said stablecoins could create a new wave of global savings and put downward pressure on U.S. interest rates in the long run.
Referring to a talk he gave about stablecoins about a month ago, Millan compared these assets to the concept of “global savings abundance” defined by former Fed Chairman Ben Bernanke 20 to 25 years ago. He recalled that at the time, countries in particular in Asia channeled large trade surpluses into the US dollar and US Treasuries, lowering US interest rates in the process. According to Millan, stablecoins could work with a similar mechanism.
Fed officials said stablecoins, defined as “payment stablecoins” under current regulations and covered by the GENIUS Act, do not offer interest or deposit insurance. Therefore, stablecoins have limited benefits for investors in countries with free capital movements, such as the United States. However, in countries with capital controls or in regions where access to banking services is difficult, stablecoins offer a stronger alternative.
Milan said the stablecoin will provide individuals in these countries with access to low-volatility savings products denominated in US dollars. This could lead to the growth of stablecoins primarily from outside the US.ミラン氏は、世界中でステーブルコインに流入する資金は最終的には米国債や銀行準備金などの資産に裏付けられたドルベースの貯蓄商品に流入し、過去の世界的な貯蓄ブームと同様の効果を生み出す可能性があると指摘している。
Milan said that according to his estimates, this new wave of savings derived from stablecoins could be about one-third the size of past global savings booms. He noted that such a scenario could put “significant” downward pressure on U.S. interest rates.
During the show, Milan also touched on economic policy, saying he believes supply-side incentives can support economic growth without causing inflation.
*This is not investment advice.
