Bank of England Financial Policy Committee external member Carolyn Wilkins highlighted the sharp jump in dollar-denominated stablecoin circulation, which topped $300 billion in mid-2026. In a speech at Queen’s University Belfast on September 15, she examined the role of digital assets in reinforcing the international standing of the US dollar. The expansion of stablecoins has driven a surge in demand for US Treasuries as primary reserve assets, with circulation climbing from early 2020 levels when it remained below $5 billion.
The Dollar-Euro Divide
The global stablecoin market is currently dominated by the US dollar, accounting for 98% of total circulating value worldwide. Wilkins emphasized that this share provides a first-mover advantage that limits the adoption of other currencies. Evidence of this disparity is visible in Circle’s euro-denominated stablecoin, which only recently crossed €400 million, a scale far too small to exert meaningful counterpressure on US dollar liquidity.
Although their circulating value rivals that of large bank deposits, the use of these instruments has not fully shifted toward mainstream payments. Instead, the hundreds of billions of dollars in capital are mostly absorbed within the crypto ecosystem for market liquidity provision, collateral posting, lending, and trade settlement.
Remittance Solutions and Mobile Access
The appeal of stablecoins extends beyond greasing crypto trading platforms to network infrastructure capable of bypassing traditional correspondent banking bureaucracy. These cross-border settlement rails operate 24/7 without interruption. In 2024, sending a $200 remittance cost an average of 6.4% globally, while in Sub-Saharan Africa, remittance fees could reach as high as 8.5%.
The stablecoin ecosystem offers an alternative route to lower high remittance costs. This cost efficiency unlocks direct financial access for residents in countries with vulnerable fiat currencies, allowing them to store wealth in US dollar-backed assets simply via a smartphone app without needing verification to open a US bank account.
Inherent Risks of Mass Redemptions
This convenient access and transfer speed carry dangerous structural vulnerabilities. Wilkins warned of potential issues if market panic triggers mass redemptions. In a crisis, stablecoin issuers would be forced to liquidate reserve assets as quickly as possible. Offloading billions of dollars in assets could transmit sudden selling pressure into the US government bond market, spilling blockchain ledger shocks into a new systemic crisis across traditional financial markets.
Source: crypto.news.
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Disclaimer: This article is for informational and educational purposes only, not financial advice. Cryptocurrency assets are highly volatile and carry significant risk. Always do your own research (DYOR) and never invest more than you can afford to lose.
