Bank of England official: Stablecoins may boost US dollar dominance

Carolyn Wilkins, a member of the Bank of England’s Financial Policy Committee, stated that the rise of dollar-denominated stablecoins could reinforce the global dominance of the US dollar. Speaking at Queen’s University Belfast, Wilkins noted that these digital assets facilitate easier cross-border settlements and expand access to dollar-linked instruments for users outside the United States.

This growth has created a significant link between the stablecoin market and US government debt. Data cited by Wilkins shows that major issuers Tether and Circle held nearly $150 billion in Treasury bills at the end of 2025, purchasing approximately $33 billion during that year. While this increases demand for US Treasuries, Wilkins warned of potential risks: large-scale redemptions could force issuers to sell their Treasury holdings, potentially increasing market volatility during periods of stress.

Currently, the stablecoin market is heavily concentrated around the US dollar, which accounts for 98% of the total stablecoin value. In contrast, the British pound has seen much slower adoption in the stablecoin sector, though UK regulators have begun implementing frameworks and testing environments to encourage development.