Stablecoins’ Potential Effects on Monetary Systems

Hung Q. Tran

No 2616, Policy briefs on Economic Trends and Policies from Policy Center for the New South

Abstract: The passage of the US Genius Act in July 2025 has spurred the growth of stablecoins, mostly dollar-based, helping to modernize and improve payment transactions. The market capitalization of stablecoins increased rapidly to $317 billion in April 2026 and is expected to grow to $3-4 trillion by 2030. While still modest in scale, stablecoins—if fully developed, especially in the face of potentially strong competition from tokenized bank deposits—could have multifaceted effects on the economy and monetary system, both positive and negative, though these remain not yet well understood. Policymakers and market participants should be aware of these potential effects in order to realize the benefits while guarding against the risks of stablecoins.

Date: 2026-05
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