The moneyness of stablecoins
plus: macro simmer or boil, yields, and more
“A reliable way to make people believe in falsehoods is frequent repetition, because familiarity is not easily distinguished from truth. Authoritarian institutions and marketers have always known this fact.” ― Daniel Kahneman ||
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Most organic stablecoin value moves through trading and investing: dollars flowing in and out of exchanges, DEXs, and DeFi. This is the largest use by a wide margin, and it has grown as the largest share of volume over the past two years.
Real-world payments and dollars held as a store of value are each a smaller, steady share. Payments behave like genuine money movement between distinct parties, and have grown in absolute terms across two years.
→ Want more detail? Read the report: https://allium.so/reports/state-of-onchain-finance-q2-26
IN THIS NEWSLETTER
The moneyness of stablecoins
Macro: a simmer or a boil?
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✨ Podcasts: upcoming streams ✨
📽 Monetary Forces: next Tuesday, Izabella Kaminska and I pick at the key headlines that paint the picture of how technology is changing finance, and Izabella will dive into the entrails of a paper illustrating an overlooked aspect of the transformation.
Tuesday, July 7 @ 4pm CEST / 3pm BST / 10am EST – livestream link: https://open.substack.com/live-stream/262758
📽 Press Publish: next Thursday, I’ll be talking to Marvin Barth about his Seriously, Marvin?! and Thematics Markets newsletters and his excellent podcast – he knows how to produce, but I want to get more insight into how he does what he does, how he deals with obstacles, what his goal is, and more.
Thursday, July 9 @ 4pm CEST / 3pm BST / 10am EST – livestream link: https://open.substack.com/live-stream/261155
The moneyness of stablecoins
For Tuesday’s episode of Monetary Forces (aaagh the tech issues!), I dove into the fascinating topic of “are stablecoins money?”.
I’ve suggested before that, if we see something as money, if we treat it as money, then surely it becomes money? My aim was to encourage a questioning of the established definition – unit of account, medium of exchange, store of value – and stress that money can change. It has often done so over the centuries and is doing so again today.
A recent paper called “The Moneyness of Stablecoins”, written by law professors Yesha Yadav, Christopher Odinet and Andrea Tosato, opened my eyes to the importance of a legal framework – without that, how will money, in whatever form, be trusted enough for widespread use?
The paper’s authors argue that stablecoins are not money. The GENIUS Act helps, but not nearly as much as many assume.
Yet they don’t argue that we should disavow stablecoins as a result. Rather, their take is “stablecoins don’t function as money yet, but here’s how we can improve on that”. The paper is not a warning, it’s a road map.
