A Bank of England policymaker said the rise of digital dollars could widen access to the US currency while making stablecoin issuers bigger buyers of US government debt.
Carolyn Wilkins, a member of the Bank of England’s Financial Policy Committee, said in a Tuesday speech at Queen’s University Belfast that the growth of stablecoins could reinforce the US dollar’s global dominance and raise demand for US Treasurys. Her remarks pointed to effects that reach beyond the crypto market itself.
Wilkins said dollar-denominated stablecoins could strengthen the greenback in three ways: by making cross-border settlement easier, by expanding access to dollar-linked assets outside the United States, and by increasing demand for Treasurys held as reserves.
According to data cited by Wilkins, 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 that year. That already places the largest stablecoin issuers among significant buyers of US government debt.
She also said the relationship works in the other direction. If stablecoin redemptions reached sufficient scale, issuers could be forced to sell Treasury bills, potentially amplifying volatility in a market that is already under stress.
Wilkins made the comments as stablecoin adoption continues to grow. More than $300 billion is now in circulation, and the market remains overwhelmingly tied to the US dollar, which accounts for 98% of stablecoin value. Wilkins said that gives the currency a “considerable first-mover advantage.”
UK steps up its stablecoin push
By comparison, pound-denominated stablecoins have been much slower to gain traction, though UK regulators have taken several steps this year to support their development.
The Financial Conduct Authority has started 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 testing digital money arrangements, including a recent experiment on whether stablecoins and a simulated digital pound could work together for cross-border trade payments.
The shift comes as the Bank of England adopts a more accommodating stance on stablecoins after industry criticism that its proposed rules could stifle innovation.