Stablecoins Could Help Cement US Dollar’s Global Dominance: BlackRock

Stablecoins could help fuel the U.S. dollar’s dominance, especially as new regulations — namely the GENIUS Act in the United States — take effect, BlackRock said in a new report.

New legislation in the U.S. “cements the role of stablecoins” as a payment means, according to BlackRock, the world’s largest asset manager. The firm in particular referenced the GENIUS Act, the landmark stablecoin bill signed into law earlier this month, which is strictly focused on stablecoins as payment tools rather than investments. The GENIUS Act restricts issuers from paying interest with so-called yield-bearing stablecoins, and limits issuance to federally regulated banks, some registered nonbanks, and state-chartered firms.

“This regulation could reinforce dollar dominance by enabling a tokenized U.S. dollar-based ecosystem for international payments,” the report argues, a sentiment echoed by many industry commentators, as well as by U.S. legislators as they were considering GENIUS.

“Users in emerging markets may get easier access to the U.S. dollar over volatile local currencies. Yet in major economies, adoption may be limited by the ban on interest payments, which aims to prevent a low-friction rival that could compete with bank deposits and hurt traditional lending.”

Stablecoins — cryptocurrencies whose value is pegged to a particular asset, most often USD — have reached a total market capitalization of over $260 billion in 2025, up from less than $10 billion in 2020. That figure accounts for about 7% of the overall crypto market, BlackRock noted in its weekly market commentary.

Currently, stablecoins total market capitalization is around $266 billion, according to data from DeFiLlama. Tether’s USDT dominates the stablecoin sector with a market cap of $164 billion, or around 62% of that total.

Low Impact on Treasury Yields

BlackRock’s report also noted that more demand for stablecoins probably won’t change short-term Treasury yields much, referencing the fact the major USD stablecoin issuers hold U.S. Treasuries as part of their reserves. The top stablecoin issuers Tether and Circle currently hold “at least $120 billion in Treasury bills,” the report notes, which makes up “only 2%” of the $6 trillion total, per BlackRock’s data.

“First, stablecoin demand for bills is likely to be offset by money shifting from similar assets, so little net new demand,” the report reads. “Second, bill issuance is set to keep surging due to the Treasury’s preference to boost the funding of persistent deficits with more short-term debt.”

A recent report from crypto research firm Messari, however, found that large-scale stablecoin inflows are linked to a drop in long-term Treasury yields, “comparable to that of small-scale quantitative easing[.]”

In general, BlackRock said it considers stablecoins one of five “mega forces” driving investment returns — the firm defines mega forces as “big, structural changes that affect investing now, and far in the future.”

Overall, BlackRock believes that new regulations and government support for digital assets will lead to greater adoption. However, the firm notes that it’s unclear how stablecoins will compete with other digital assets as they remain a “relatively small part” of the larger crypto universe.

BlackRock’s report was released the same day that crypto asset manager Bitwise posted on X: “Stablecoins are going parabolic.” Meanwhile, a recent report from crypto bank Sygnum echoed similar views that stablecoins could strengthen the U.S. dollar’s global position.

Sygnum’s findings highlight that, while the dollar remains central to global markets, its long-term dominance faces increasing challenges. In response, the U.S. government has been turning to stablecoins to counteract “de-dollarization” trends, particularly by providing emerging markets with easier access to dollar-backed digital payments.