Fed Governor Miran calls stablecoins 'a force to be reckoned with' that could put downward pressure on interest rates

Stablecoins are an "area of enormous growth," said Federal Reserve Governor Stephen Miran as he spoke about cryptocurrency for the first time in his new position. 

"Based on the surveys that I've seen, the forecasts that I've seen, it's a force to be reckoned with absolutely," Miran said on Friday when he was asked about crypto during a panel at the BCVC Summit in New York City. Miran seemed less sure of where the rest of crypto is headed, but said lots of innovation was happening either way. 

"However, I do think there's a lot of innovation happening and that innovation is already starting to have economic consequences of the type that matter for the Fed and of the type that matter for monetary policy," Miran added. 

Miran assumed his role as Fed chair in September after being confirmed by the Senate. Before, he served as chair of the Council of Economic Advisers under President Donald Trump. 

On Friday, in a prepared speech at the summit ahead of answering questions, Miran said that the widespread use of stablecoins could put "downward pressure on interest rates."

"Even relatively conservative estimates of stablecoin growth imply an increase in the net supply of loanable funds in the economy that pushes down r*," Miran said, referring to the neutral rate of interest measured when the economy is at full employment and stable inflation. "If r* is lower, policy rates should also be lower than they would otherwise be to support a healthy economy."

Miran joined the central bank amid tension over cutting interest rates, and as Trump has pushed for steeper cuts, which received pushback from Fed Chair Jerome Powell and other top leaders at the central bank. Miran has called for rate cuts, and on Thursday said he expected rate cuts in December, according to reporting from Reuters.