Dollar-backed stablecoins have gained support from U.S. Federal Reserve Governor Christopher Waller, who has said their growing international use could extend the reach of U.S. monetary policy into other economies.
Summary
- Federal Reserve Governor Christopher Waller said growing use of dollar-backed stablecoins could extend the influence of U.S. monetary policy abroad.
- Bank of England policymaker Megan Greene said tokenized deposits may eventually overtake stablecoins as the preferred form of digital money.
- The comments come as U.S. lawmakers continue debating stablecoin rules and UK regulators review parts of their proposed stablecoin framework.
According to Bloomberg News, Waller told participants at the 32nd Dubrovnik Economics Conference in Croatia on Sunday that countries increasingly using dollar-backed stablecoins may end up importing U.S. monetary conditions alongside the digital assets.
Addressing a panel focused on stablecoins and monetary policy, Waller described stablecoins as payment tools rather than a source of concern. Reuters reported that he said stablecoins introduce competition into the payments sector and do not pose an inherent threat.
His comments arrive as lawmakers in Washington continue debating how stablecoins should be regulated under pending crypto legislation.
Disagreements over whether stablecoin issuers and platforms should be allowed to offer yield have complicated efforts to advance the Digital Asset Market Clarity Act, one of the most significant crypto market structure bills currently before Congress.
Over the weekend, Wyoming Senator Cynthia Lummis warned that the U.S. could lose ground to other countries, including China, if lawmakers fail to pass crypto legislation this year.
Bank of England sees a different future
Offering a contrasting view at the same conference, Bank of England policymaker Megan Greene questioned whether stablecoins would remain dominant in digital finance over the long term.
Reuters reported that Greene argued tokenized bank deposits could eventually become the preferred form of digital money. Comparing different forms of digital currency to a race, she said central bank digital currencies, stablecoins, and tokenized deposits may all coexist, though she believes tokenized deposits are the most likely to gain momentum.
Greene also pushed back against suggestions that interest in central bank digital currencies has faded. Waller, who has long criticized CBDCs, said enthusiasm among central banks has cooled in recent years.
The debate comes as Bank of England officials continue to take a more cautious position on stablecoins than their U.S. counterparts.
Earlier this month, Bank of England Governor Andrew Bailey warned that regulators could face a difficult confrontation with Washington over stablecoin oversight.
According to Bailey, global payment use cases would require common international standards and described future discussions with the United States as a likely “coming wrestle.”
Financial stability concerns remain central to the Bank of England’s approach. Bailey has argued that some stablecoins may not be easily redeemable during periods of market stress and warned that countries could face redemption pressures if dollar-backed stablecoins become widely used across borders.
UK reconsiders stablecoin stance
At the same time, UK policymakers have begun reconsidering parts of their proposed stablecoin framework. According to the Financial Times, Bank of England Deputy Governor Sarah Breeden said the central bank is reviewing proposed ownership caps and reserve requirements after industry participants argued the measures could make pound-backed stablecoins difficult to use at scale.
Under proposals published in November 2025, stablecoin issuers would have been required to hold 40% of reserves as non-interest-bearing deposits at the Bank of England, while individual users would have faced temporary holding limits of £20,000.
As stablecoin adoption continues to expand, the policy discussion is increasingly extending beyond reserves and redemption rules. Industry executives, including Parfin CEO and co-founder Marcos Viriato, have argued that compliance controls, privacy protections, interoperability, and settlement efficiency may ultimately play a larger role in determining which forms of digital money gain institutional adoption.
