Stablecoin Restrictions May Cost US $1 Trillion, Circle Executive Warns

Circle executive Nikhil Chandhok has warned that US restrictions on dollar stablecoins could cost the country $1 trillion in overseas demand for dollars. He made this argument during a discussion about the agentic economy, which includes AI payments and software agents carrying out tasks.

Chandhok believes that the appeal of dollar-backed stablecoins lies in their ability to provide access to dollars outside the US without waiting for conventional international bank transfers. This is particularly relevant given that roughly $3 trillion is in transit across the international banking system at any moment, where it remains idle due to 'old' technology and settlement protocols.

Circle has pursued this payment use case through its dollar stablecoin, $USDC. In July, the company connected $USDC settlement tools with Fireblocks, allowing their customers to access Circle's Gateway and Payments Network, including a route for $USDC transfers that end in local-currency payouts through providers in more than 50 countries.

Chandhok's argument also has implications for US Treasury demand. Under the GENIUS Act, permitted payment stablecoin issuers must hold reserves at least equal to the tokens they issue. Eligible reserves include dollars, certain deposits, short-term US Treasury securities, and other qualifying assets.