Bloomberg: U.S. Sees Dollar Stablecoins Reaching About $3 Trillion in Coming Years

The U.S. government is betting that U.S. dollar-denominated stablecoins issued by private entities such as Tether could expand to about $3 trillion in the coming years, Bloomberg reported, as part of an effort to support the dollar’s international dominance and generate additional demand for U.S. Treasuries. According to ChainCatcher, the report also flagged risks tied to the current concentration of major stablecoin issuance in Tether, citing questions around its jurisdictional compliance and anti-money-laundering practices. The article said that a run on a major stablecoin or a smart-contract failure could affect large Treasury holdings associated with stablecoin reserves and disrupt global payment and settlement systems. It added that the European Central Bank is advancing central bank digital currency initiatives and a “tokenized euro” approach aimed at enabling atomic settlement, seeking to avoid reliance on U.S. private dollar tokens in critical financial infrastructure.