Fed’s Waller Links Stablecoins To U.S. Treasury Demand

Federal Reserve Governor Christopher Waller has placed stablecoins directly inside the debate over the dollar’s global role, pointing to digital assets as a new channel for payments, dollar access and demand for U.S. safe assets.

In June 22 welcoming remarks at the Fed’s Fifth Conference on the International Roles of the U.S. Dollar in Washington, D.C., Waller said digital assets such as stablecoins are creating new channels for global dollar intermediation alongside traditional banking and payment systems. He also said conference papers were examining how dollar-backed stablecoins may connect global liquidity demand directly to U.S. Treasury markets.

That puts a central-bank policymaker behind one of crypto’s biggest macro arguments: stablecoins are no longer just exchange settlement tokens. They are becoming large private-sector distribution rails for dollar-denominated assets, with reserve portfolios that can feed demand for Treasury bills and other short-duration government instruments.

The market is already large enough for the Fed to pay attention. Total stablecoin market capitalization stood near $315.4 billion, with USDT and USDC still dominating supply. Most major fiat-backed stablecoins hold reserves in cash, Treasury bills, repo and other short-term liquid instruments, turning user demand for digital dollars into issuer demand for safe assets.

Tether Shows The Scale Of The Treasury Link

Tether remains the clearest example of how stablecoin supply can overlap with U.S. government funding demand. The company reported about $141 billion in direct and indirect U.S. Treasury bill exposure as of March 31, alongside roughly $183 billion in token-related liabilities.

That reserve base puts Tether in the same conversation as major foreign official holders of U.S. debt. U.S. Treasury TIC data placed South Korea’s Treasury holdings at $135.2 billion at the end of April, below Tether’s reported Treasury-linked exposure from Q1.

The comparison does not make Tether a sovereign investor. It shows how large stablecoin issuers can become structural buyers of short-term U.S. debt when global users hold digital dollars for trading, payments, savings and cross-border transfers. More stablecoin demand can require more reserves. More reserves can mean more Treasury-bill demand, particularly when regulation pushes issuers toward highly liquid government-backed assets.

That same structure has made Tether one of the most profitable companies in crypto. Its recent USDT reserve-buffer report showed how Treasury-heavy reserves can turn stablecoin scale into large interest income.

Stablecoin Growth Brings Redemption Risk

The macro link cuts both ways. Stablecoins can support Treasury demand while supply is growing, but large redemptions can force issuers to raise cash quickly. That is why analysts often compare large stablecoin issuers with money-market funds: both promise near-par value, both depend on liquid short-term assets, and both can face pressure if users rush to redeem.

A heavily regulated stablecoin market could reduce some of that risk by setting clearer reserve, custody, disclosure and redemption rules. It could also make the Treasury connection stronger if issuers are required to hold more cash-like assets. Newer U.S.-facing stablecoins, including Tether-backed USAT and Ripple’s RLUSD, are already competing around regulated issuance, reserve transparency and institutional settlement use cases.

For Ripple, RLUSD and other regulated stablecoin issuers, Waller’s remarks strengthen the argument that dollar tokens are becoming part of financial-market plumbing rather than only crypto trading collateral. That matters for networks such as XRP Ledger, where RLUSD and tokenized assets are already part of the RWA settlement story.