Digital dollar expansion via stablecoins could increase demand for US Treasuries and strengthen the greenback, according to a Bank of England official.
Stablecoin growth may increase demand for dollars and US Treasuries, strengthening the dollar.
A Bank of England policy maker suggests that the proliferation of digital dollars could significantly broaden access to the US currency. This shift may transform stablecoin issuers into major purchasers of US government debt, potentially reinforcing the dollar's global standing.
Stablecoins often hold US Treasuries as reserves, meaning their growth increases demand for government debt and reinforces the dollar's utility.