Dollar-backed stablecoins are becoming more than a crypto-market settlement tool. Their growth could widen access to dollar payments and add demand for short-term US government debt, while making redemption management and reserve liquidity more important to the wider financial system.
That was the central payments implication of a September 15 speech by Carolyn Wilkins, a member of the Bank of England’s Financial Policy Committee. Wilkins said roughly 98% of stablecoin value is denominated in US dollars, giving the currency a substantial early advantage as tokenized money moves into cross-border settlement and other uses beyond crypto trading. Her remarks were explicitly presented as her own views rather than those of the committee or other Bank of England officials.
Settlement, dollar access and reserve demand
Wilkins identified three channels through which greater use of dollar stablecoins could matter. First, tokens can move around the clock and across borders without traversing every link in a conventional correspondent-banking chain. They do not eliminate intermediaries, but they may reduce dependence on some traditional banking links where cross-border payments are slow or expensive.
Second, a dollar stablecoin can give a user outside the United States access to a dollar-linked asset without a US bank account. That may be useful in some markets where the local currency is unstable or dollar banking is difficult to access. The practical effect will still depend on local liquidity, redemption arrangements, foreign-exchange access and regulation; a token alone does not remove those constraints.
Third, issuers must invest the assets backing their circulating tokens. Wilkins said USDT and USDC together held almost $150 billion in Treasury bills at the end of 2025 and made about $33 billion of net Treasury-bill purchases during that year, citing research by Rashad Ahmed and Iñaki Aldasoro.
The revised Bank for International Settlements working paper behind that analysis says stablecoin issuers’ combined assets under management exceeded $270 billion in December 2025 and that the sector purchased nearly $35 billion of Treasury bills during the year. The paper estimates that a $3.5 billion stablecoin inflow reduced three-month Treasury-bill yields by 0.71 basis points on impact and by about four basis points within 10 days. The authors found larger effects when Treasury-market intermediaries were under stress and as the stablecoin sector grew.
Those findings do not mean every dollar entering a stablecoin creates an equal amount of new demand for US debt. Wilkins noted that a transfer from a Treasury money-market fund into a stablecoin whose issuer buys Treasury bills would produce little net change. The effect could be larger when funds move from another currency or asset class. If stablecoins draw materially from bank deposits, the shift could instead affect bank funding costs and credit supply.
The reserve link also works in reverse
The same mechanism that converts stablecoin inflows into reserve purchases can turn redemptions into asset sales. Stablecoins are redeemable claims that trade continuously, so issuers need reliable access to cash when holders want to exit.
Wilkins said simultaneous Treasury-bill sales by several large issuers could amplify changes in yields and market liquidity if the sales occurred during an already stressed market. She also stressed that the sector is not currently large enough for this mechanism to pose a major threat to the Treasury market or a material UK financial-stability risk. The concern is prospective: the connection would become more important if stablecoins grow substantially.
For payment providers, reserve quality is therefore only part of the risk analysis. Treasury bills may be high-quality assets, but operators, banking partners and regulators also need to understand redemption timing, custody concentration, access to settlement accounts, contingency funding and how reserve assets would be converted into cash under pressure.
Cross-border tokens still need cross-border rules
Wilkins also highlighted a jurisdictional problem. A stablecoin can be issued in one country, hold reserves in another, use a custodian in a third and serve customers in many more. Redemption rights, insolvency treatment and crisis-management responsibilities do not automatically follow the token across those borders.
The United Kingdom’s emerging framework for systemic sterling stablecoins places particular emphasis on liquidity contingency planning, payment-system access and failure arrangements. Wilkins contrasted that approach with the US framework established by the GENIUS Act, while acknowledging that the regimes cover different scopes. The UK rules discussed in the speech apply to stablecoins recognized as systemic, rather than to every payment stablecoin.
The strategic result is not a simple forecast that stablecoins will guarantee continued dollar dominance. Dollar tokens may extend dollar settlement into new digital networks, but payment rails can diversify even while the dollar remains widely used. Wilkins argued that long-term monetary influence still depends on fiscal and monetary credibility, legal institutions, deep capital markets and the capacity to provide liquidity during stress.
For the payments industry, the near-term lesson is more concrete: growth in dollar stablecoins joins payment operations, reserve management and government-debt markets in one balance-sheet chain. As that chain expands, the quality of liquidity planning and cross-border supervisory coordination will matter as much as transaction speed.