The firm tied that view to the GENIUS Act, which creates a federal framework for payment stablecoins. The paper defines stablecoins as digital tokens that are pegged to fiat and hold reserves.
Furthermore, it tracks rapid adoption since 2020 to roughly $250 billion, or about 7% of the crypto market by value.
BlackRock detailed how the law rewrites the rulebook. Legislation now classifies stablecoins as a payment method, bans interest on balances, and confines issuance to federally regulated banks, some registered nonbanks, and state-chartered firms.
The report assessed that this structure can strengthen the dollar’s role by enabling a tokenized dollar payment network for cross-border use. At the same time, the interest ban may curb take-up in major economies that already offer attractive bank deposits.
The note also drills into reserves. Issuers would hold mostly repos, money market funds, and US Treasury bills with 93 days or less to maturity. BlackRock pointed to Tether and Circle as the largest buyers, with at least $120 billion in T-bills, about 2% of the roughly $6 trillion in bills outstanding.
Even if demand grows, the institute expects only a small effect on bill yields because money would largely rotate from similar assets, and the Treasury plans to keep expanding bill supply.
If other jurisdictions allow interest-bearing stablecoins or push central bank alternatives, the dollar’s role in trade finance could face new competition. However, US officials could address this by allowing interest in the future.
On market plumbing, BlackRock expects limited effects on short-term Treasury yields from stablecoin growth, while it keeps bitcoin separate as a distinct return driver.
