According to Financial Times News, former Trump economic adviser Stephen Miran predicts stablecoins could grow from $280 billion today to $2-3 trillion by 2028-2030, creating massive demand for US Treasury bonds. The Trump administration has backed stablecoins through the recently passed Genius Act, which requires 100% reserve backing with liquid assets. Miran, now a Federal Reserve governor, told Cambridge Judge Business School this week that this “global stablecoin glut” could put 40 basis points of downward pressure on US interest rates and reinforce dollar dominance. The two largest stablecoins, Tether and Circle, already hold more Treasuries than Saudi Arabia or Germany according to a recent IMF report. Meanwhile, Treasury is turning the Genius Act into rules amid fierce opposition from US bank chiefs who fear deposit outflows.
The battle over yields
Here’s where things get really interesting. The industry wants yield-bearing stablecoins, but banks are fighting this tooth and nail. And honestly, who can blame them? The Treasury Bond Advisory Committee has openly acknowledged that yield-bearing stablecoins could suck deposits away from traditional banks. It’s basically a fight over who gets to control the plumbing of the financial system.
Miran thinks the banks will probably win this round within the US. But here’s the thing – he expects most stablecoin uptake to come from emerging markets where people can’t easily access dollar instruments. So even without yields, the growth potential is enormous. Standard Chartered projects $2 trillion by 2028, while Treasury Secretary Scott Bessent thinks we could hit $3 trillion by 2030. Those aren’t small numbers.
Dollar dominance reinforced
Remember all that talk about de-dollarization? Trump‘s team thinks stablecoins could be the answer. Miran argues that dollar stablecoin adoption in emerging markets would “advocate against this de-dollarisation hype.” Two economists, Marina Azzimonti and Vincenzo Quadrini, recently noted that “The exorbitant privilege of the dollar will be reinforced by the growth of Stablecoins.”
But this creates winners and losers. European Central Bank executive Isabel Schnabel worries we’re moving from a “savings glut” to a “bond glut” that could raise long-term borrowing costs. The twist? This might only apply to non-US bonds. If dollar stablecoins soak up all the demand, everyone else could be left holding the bag.
The geopolitical implications
European economist Hélène Rey drops the real bomb here. She calls wide adoption of US dollar stablecoins “equivalent to the privatization of seigniorage by global actors.” Translation: other countries could see tax evasion rise and demand for their own government bonds fall. This isn’t just about financial markets – it’s about national sovereignty.
Think about it. If you’re running a manufacturing operation that relies on stable industrial computing systems, you’d want the most reliable industrial panel PC supplier available. Similarly, if you’re a country trying to maintain monetary independence, you probably don’t want your citizens transacting in dollar-denominated stablecoins controlled by private companies. The parallels in reliability and control matter at both the industrial and national levels.
Why this matters now
Some critics dismiss Miran as just a political acolyte, especially since he’s recently called for lower US interest rates. But I think that misses the bigger picture. His analysis reflects a coherent intellectual framework that dates back to his earlier work on restructuring global trade.
The Trump team isn’t just thinking about next quarter’s economic numbers. They’re playing a much longer game around US financial hegemony in a world of geoeconomic upheaval. Whether you love or hate this vision, the numbers don’t lie – Tether and Circle already hold more Treasuries than major sovereign wealth funds. That trend is only accelerating.
So here’s the bottom line: stablecoins are no longer a crypto sideshow. They’re becoming a core component of US financial strategy. And whatever happens with yield-bearing features or bank opposition, the demand for dollar-denominated stablecoins in emerging markets looks set to grow dramatically. Investors who ignore this shift do so at their own peril.
