Carolyn Wilkins, a member of the Bank of England‘s Financial Policy Committee, says the rise of stablecoins could reinforce the US dollar’s global dominance and increase demand for US Treasurys, underscoring how the growing market for digital dollars could have consequences well beyond crypto.
In a Tuesday speech at Queens University Belfast, Wilkins said dollar-denominated stablecoins could strengthen the greenback by making cross-border settlement easier, expanding access to dollar-linked assets outside the US and increasing demand for Treasurys held as reserves.
The largest stablecoin issuers are already significant buyers of US government debt. Tether‘s USDt (USDT) and Circle’s USDC (USDC) held nearly $150 billion in Treasury bills at the end of 2025 and bought roughly $33 billion during the year, according to data cited by Wilkins.
However, Wilkins argued that the relationship cuts both ways. At sufficient scale, mass stablecoin redemptions could force issuers to sell Treasury bills, potentially amplifying volatility in an already stressed market.
Stablecoin issuers have become significant holders of US Treasury debt. Source: Bank of England
Wilkins comments come as stablecoin adoption continues to grow, with more than $300 billion now in circulation. The market remains overwhelmingly tied to the US dollar, which accounts for 98% of stablecoin value and gives the currency what Wilkins described as a “considerable first-mover advantage.”
Related: BofA, Citi, Goldman Sachs among 21 institutions planning stablecoin launch
UK ramps up stablecoin efforts
By contrast, British pound-denominated stablecoins have been much slower to gain traction, although UK regulators have taken several steps this year to encourage their development.
The Financial Conduct Authority began testing prospective stablecoin issuers through a dedicated regulatory sandbox and finalized rules for UK stablecoin issuance in June. The Bank of England has also been experimenting with digital money, including a recent test of whether stablecoins and a simulated digital pound could work together for cross-border trade payments.
The shift comes as the Bank of England takes a more accommodating approach to stablecoins following industry criticism that its proposed rules could stifle innovation.
Related: Fragmented regulations limit stablecoin adoption in international finance: WTO head