Circle executive says limiting dollar stablecoins could forfeit up to $1 trillion in overseas dollar demand

# What Chandhok said and why it matters

# The numbers Chandhok referenced

# How stablecoins could link to US Treasury demand

The connection between stablecoin adoption and US government debt comes through reserve rules for issuers. Under the GENIUS Act, permitted payment stablecoin issuers must hold reserves at least equal to tokens issued. Eligible reserve assets include dollars, certain deposits, and short-term US Treasury securities.

A separate analysis cited at the event found that Tether and Circle increased Treasury bill holdings by about $70 billion since 2022, using data through September 2025. That shows some existing overlap between stablecoin reserves and Treasury bill purchases, but Chandhok did not assert a one-to-one relationship that every additional dollar in stablecoins becomes a Treasury purchase.

Regulators are actively shaping the framework. The Federal Reserve issued proposed reserve rules and a proposal covering bank applications to issue payment stablecoins. The Fed identified short-term Treasury bills among assets that could back tokens for supervised issuers. The GENIUS Act sets timing rules for application review and identifies Jan. 18, 2027 as an expected effective date for issuer restrictions while allowing earlier start after implementing rules are final.

# Circle's operational push

Circle has been building infrastructure to capture a settlement use case. In July, Circle and Fireblocks integrated to give institutions access to Circle's Gateway and Payments Network with routes for USDC transfers that can end in local-currency payouts through providers in more than 50 countries. The companies said those payments can settle in minutes versus multi-day correspondent-banking processes.

Fireblocks reported that stablecoins accounted for 69% of its platform's digital asset transaction volume in Q2 2026. Circle's Gateway allows participating institutions to manage a unified USDC balance across supported blockchains while Fireblocks layers institutional controls like transaction approvals and sanctions screening on transfers and payouts.

# Why the argument matters to policymakers and markets

# Short takeaway

Chandhok's $1 trillion figure is a projected potential tied to faster, digital dollar settlement and dollars already moving slowly through correspondent banking. Whether that potential becomes actual capital flows will depend on regulatory design, issuer reserve choices, and uptake of the operational infrastructure Circle and partners are building.