Single Minded? Stablecoins and the Singleness of Money
Jannah Patchay, Founder and Director of Markets Evolution, has co-authored a paper entitled 'Single Minded? Stablecoins and the Singleness of Money’ alongside seven fellow digital currency and policy experts, including former regulators, academics, industry practitioners and consultants.
The authors propose that appropriate and proportionate regulation of stablecoins - with a focus on ensuring their stability - can preserve singleness much as it does in today’s monetary system. The paper was born out of a shared view that recent policy discussions on singleness tend to focus on an abstracted ideal - one which may not be realistic for the rapid changes brought about in the continued digitisation and innovation of financial services, and aren't in fact realistic when viewed in the context of today's reality either. In it, they discuss:
How different forms of money have evolved over time;
How singleness is defined, its history, and the distinction between singleness in theory and in practice;
The implications that the interplay of stablecoins and traditional forms of money may have on singleness, including the nature of stablecoins;
The implications for the integration of stablecoins into the financial services ecosystem;
The mechanisms by which singleness in practice is currently achieved today; and
Recommendations for the role of policy in preserving singleness.
“Rethinking our approach to the singleness of money, and acknowledging the realities that apply to this ideal, would lay the foundation for stablecoins that are both well-regulated and shaped by the appetite and needs of people and businesses.”
The key message: Regulate for stability, and singleness will follow! Appropriate and proportionate regulation of stablecoins - with a focus on ensuring their stability - can preserve singleness much as it does in today’s monetary system, while pursuing an extreme goal of singleness for its own sake risks not only undermining innovation, but also, ultimately, the competitiveness of our financial systems and economies.
The paper was co-authored with Rhys Bidder, Kene Ezeji-Okoye, Matthew Osborne, Varun Paul, Tom Rhodes, Elise Soucie Watts and Andrew Whitworth, PhD, and published by the Qatar Centre for Global Banking and Finance, King's College London.
Note that the paper is an expression of the authors’ personal views and does not reflect the stances of their respective organisations.