Federal Reserve Governor Christopher Waller has defended stablecoins during a panel at the 32nd Dubrovnik Economics Conference, placing the tokens in the payments debate rather than the wider crypto risk debate. Waller stated that "I've always just looked at stablecoins as a payment instrument; there's nothing evil about it, nothing dangerous about it." He emphasized that stablecoins bring more competition into payments and can lower costs, as reported by Reuters. Waller also noted that countries that use more dollar-backed stablecoins may import U.S. monetary conditions, placing stablecoins inside the debate over dollar reach, payment competition, and central bank control.
The Bank of England's policymaker Megan Greene has raised concerns about the long-term viability of stablecoins, suggesting they may soon be replaced by tokenised deposits or digital versions of traditional bank deposits. Speaking at the same Dubrovnik conference, Greene stated that "I think tokenised deposits are probably going to take over from stablecoins and five years from now, I suspect we might wonder why we were talking about stablecoins." She argued that commercial banks are losing traditional bank deposits to stablecoins and will eventually develop digital alternatives to retain their fee structures. Greene noted that stablecoins are not as stable as claimed, face regulatory questions, and are sometimes used for illicit purposes, while also reducing the effectiveness of monetary policy through cross-border payments that scare traditional banks.
Bitcoin's dominance rate has continued its decline to 58% from 61.20% since May 5, while dollar-pegged stablecoins have gained significant ground. According to reports from CoinDesk, Tether's USDT increased its dominance from 7% to 7.5%, while Circle Internet's USDC rose from 2.8% to 3% during the same period. This shift represents a clear rotation of capital away from bitcoin and into tokenized versions of the U.S. dollar. The latest data shows this trend continuing with traders increasingly favoring dollar-pegged stablecoins over Bitcoin as a preference for safer assets amid expectations that the Federal Reserve will keep interest rates elevated. As FxPro's Alex Kuptsikevich notes, the strengthening presence of USDT and USDC highlights a market leaning toward caution rather than aggressive risk-taking.
Despite the declining dominance, Bitcoin continues to attract significant institutional interest through exchange-traded funds. Since spot Bitcoin ETFs launched in January 2024, cumulative inflows have reached $58.72 billion, with BlackRock's IBIT alone holding $67 billion in assets under management as of May 2026. The post-halving cycle hasn't peaked yet, and any Fed policy shift could serve as a catalyst that pushes Bitcoin price higher. Institutional buyers are making Bitcoin's scarcity count, with the cryptocurrency's hard cap of 21 million coins serving as the bedrock of the investment thesis. JPMorgan's launch of JLTXX, a tokenized money market fund running on Ethereum, has created a new steady source of demand for ETH as a settlement asset, while the upcoming Glamsterdam upgrade targets L1 scaling improvements that could cut fees and boost throughput.
The remarks came as U.S. lawmakers continue to debate the CLARITY Act, a digital asset market structure bill that advanced 15-9 in the Senate Banking Committee on May 14 after months of debate. Senator Cynthia Lummis has warned that if the bill fails, the next real window for digital asset legislation may not arrive until 2030. The debate centers on stablecoin rewards, with banking groups warning that yield-like rewards on stablecoin balances could move deposits away from traditional lenders, while crypto firms argue that regulated digital asset products should be allowed to offer customer benefits. Lummis has linked the bill to U.S. financial leadership, stating "America built the dollar-dominated financial system that has anchored global stability for a century. The Clarity Act ensures we build the next one."
Bitcoin is currently trading at $75,856 after experiencing a slight 1.01% decline, with on-chain data showing cautious whale wallet behavior and balanced exchange flows. According to the latest reports, this price pullback suggests consolidation rather than panic selling, with miner activity remaining steady. The current trading activity indicates that while bitcoin remains near the $75,000 level, there is no strong buying or selling pressure driving significant price movements. This measured approach from large investors suggests a wait-and-see stance as market conditions evolve, with broader market indicators showing Nasdaq e-mini futures reaching record highs above 30,000 points while WTI oil fell 3% to $90 per barrel. The cautious market sentiment reflects investor positioning ahead of key economic data, including the upcoming U.S. ADP employment report.
The current market dynamics reflect changing institutional preferences and regulatory clarity that favor established cryptocurrencies. XRP's legal battle with the SEC is over, and the token rallied nearly 90% in 2025 after gaining full regulatory clarity, with Ripple's RLUSD stablecoin expanding beyond remittances. Chainlink has already processed over $30 trillion in transaction value as of April 2026, up from about $5–10 trillion in 2021, across more than 2,500 integrations on over 60 blockchain networks. The real-world asset tokenization market is projected to hit $10–16 trillion by 2030, positioning Chainlink as the leading player in oracle services. However, the rotation toward dollar-pegged stablecoins and institutional ETF demand suggests that while Bitcoin and select altcoins maintain utility and institutional backing, the broader market sentiment remains cautious amid ongoing macroeconomic uncertainties, with Bank of England officials questioning the long-term viability of stablecoins in favor of tokenized deposits.
