How stablecoins are quietly becoming the Fed’s debt buyer of last resort

Circle president Heath Tarbert told Congress on Sept. 2 that placing digital-dollar infrastructure under US rules could reinforce the network effects that support the currency’s global role. The testimony framed stablecoin and digital asset legislation as a tool of dollar statecraft.US rules can strengthen private dollar-token rails, while official reserve share remains a separate contest. Regulated stablecoins can spread private use of dollar-denominated tokens, change how issuers hold reserves, and add demand for short-term Treasuries.Central banks remain responsible for deciding which currencies they hold. Tarbert acknowledged the boundary, arguing that payment technology cannot substitute for sound economic policy and that digital infrastructure cannot preserve dollar primacy on its own.The dollar accounted for 57.13% of allocated global foreign exchange reserves in the first quarter of 2026, up from 56.42% in the fourth quarter of 2025, according to the International Monetary Fund’s latest COFER brief. Exchange-rate valuation effects accounted for around half of that quarterly increase.The latest move was an increase, even against a longer-term decline in the dollar’s official...