Nikolas Sargeant
Federal Reserve Governor Christopher Waller has expressed strong support for the regulation of stablecoins, believing that clear rules will help solidify the US dollar’s dominance as a global reserve currency. In a February 6 interview with the Atlantic Council, Waller, who signals interest cuts, explained that stablecoins could broaden the reach of the US dollar and make it an even more essential currency in international trade and finance. He emphasized that effective regulation of stablecoins would enhance their utility while reinforcing the dollar’s position as the world’s primary currency for trade and investment.
Waller’s comments come amid rising concerns that the US dollar could lose its dominant position, particularly as the BRICS nations push for alternatives. The US dollar currently makes up more than 99% of stablecoin currency shares, with Tether (USDT) accounting for nearly 80% of global stablecoin trading volume. Waller believes that stablecoins, when properly regulated, would act as a net positive for the US payment system and make efforts by other countries to bypass the dollar much more challenging.
In addition to his support for stablecoin regulation, Waller noted the complexities of stopping stablecoin usage, stating that it is more difficult to block digital assets on the blockchain than it is to seize physical currency. This assertion comes as the US faces increasing competition in the stablecoin market, with offshore exchanges gaining a larger share of transactions. Waller’s stance aligns with broader efforts, including the recent introduction of the GENIUS stablecoin bill by Senator Bill Hagerty, which seeks to establish a regulatory framework for US-pegged stablecoins.
Stablecoins have gained significant traction, surpassing a $200 billion market capitalization in January 2024. Their rapid growth has been further driven by the rise in automated transactions, with total stablecoin transaction volumes reaching $27.6 trillion—far exceeding the combined volumes of Visa and Mastercard.
