Fed Recognizes Stablecoin Benefits but Warns of Risks to Banks and Bond Markets

In recent months, stablecoins have become one of the central topics in U.S. monetary policy. Discussions about their role surfaced during the latest meeting of the Federal Open Market Committee (FOMC), where Fed officials acknowledged that these digital assets could significantly improve the efficiency of the payment system. At the same time, they warned that their rapid expansion poses risks to the banking sector, U.S. Treasury markets, and global financial stability.

More Efficient Payments and the Impact of the GENIUS Act The FOMC minutes revealed that stablecoins have, for the first time, entered formal policy debate. Participants emphasized that they could accelerate and reduce the cost of financial transactions—not only between banks but also across the broader payment infrastructure. Stablecoins have the potential to reduce friction, increase liquidity, and bring new dynamics to the U.S. financial system. Equally important is the influence of the GENIUS Act, which expanded the scope for stablecoin use and encouraged their broader integration into economic policy.

Risks for Banks and Bond Markets The Fed also highlighted the downsides. Stablecoins are often backed by U.S. Treasury securities, which may strengthen demand for these assets but also create systemic vulnerabilities. Concerns include maturity mismatches, reserve management risks, and possible threats to the stability of the banking sector. This dual perspective underscores that the Fed views stablecoins not only as innovation but also as a potential source of problems if their management is not properly regulated.

A Global Dimension: Both the U.S. and China Push Toward Stablecoins Stablecoins are not just an American issue. In the United States, large banks have already received approval from the Office of the Comptroller of the Currency (OCC) to work with stablecoin issuers. On the other side of the globe, China is considering the introduction of yuan-backed stablecoins. Such a move would strengthen the international standing of the Chinese currency and potentially challenge the dominance of the U.S. dollar. Reports suggest that Beijing is preparing pilot programs in Hong Kong and Shanghai. This represents a dramatic reversal from its earlier stance, when the Chinese government strictly suppressed cryptocurrencies.

Stablecoins as a New Chapter of the Financial System The fact that stablecoins are now part of official Fed discussions marks a significant step toward their institutional integration. For the crypto market, it sends a clear signal: these digital assets can no longer be dismissed as marginal, but must be recognized as a growing part of the future global financial infrastructure.

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