Fed’s Miran Says Stablecoins to Put Downward Pressure on Rates

Federal Reserve Governor Stephen Miran said the growth of stablecoins could over time put substantial downward pressure on the neutral interest rate that would neither stimulate nor restrict the economy.

Miran, speaking in remarks prepared for an event Friday in New York, said that even relatively conservative estimates of stablecoin growth imply an increase in the net supply of loanable funds in the economy. That extra supply, he said, pushes down the neutral rate, which economists refer to as “R-star.”

“If R-star is lower, policy rates should also be lower than they would otherwise be to ...