CEPR & VideoVox Economics 55d ago

Many observers expect stablecoins to emerge as a widely adopted new form of money. Policymakers in the current U.S. administration have suggested that U.S.-issued stablecoins could achieve global circulation, potentially strengthening demand for U.S. Treasuries and reinforcing the international role of the dollar. At the same time, recent industry initiatives envisage the use of stablecoins as settlement assets in cross-border payments, for example through so-called “stablecoin sandwich” arrangements. This webinar examines the flow-of-funds implications of large-scale global stablecoins for the financial system, including in a highly asymmetric scenario, with a particular focus on financial stability risks and possible policy responses. It compares regulatory approaches across jurisdictions, highlighting both differences and areas of common ground, especially the widespread view that stablecoins should not be remunerated. It further explores alternative ways to address the risks associated with successful stablecoins, proposes a set of core regulatory principles, and discusses the widespread belief that prohibiting remuneration is suitable to safeguard financial stability. Finally, it outlines three regulatory options consistent with these principles. The webinar will feature Ulrich Bindseil (TU Berlin and SAFE) as the presenter, Ignazio Angeloni (SAFE) as the discussant and will be moderated by Jan Pieter Krahnen (SAFE and CEPR).