Baudouin de Hemptinne and Gaetan Bakalli
The consequence of stablecoins development on trust in the monetary system
Robert Triffin International , June 2026
Abstract
In recent years, stablecoins have become a salient feature of financial markets and regulatory debates, reinforced by explicit policy choices in the United States and by their inclusion in the European MiCAR framework. While the growing literature on stablecoins has largely focused on financial stability and systemic risk, this paper reflects on their broader international political economy implications. Building on the post-Bretton Woods monetary order, the paper conceptualizes fiat money as resting on institutional trust embedded in a two-tier fractional banking system. It argues that the rise of stablecoins and its potential substitution to traditional money if becoming systemic weakens this trust in at least three ways: by transforming the two-tier system of money creation into a three-tier structure, by reducing the efficiency of central bank monetary policy transmission, and by fragmenting the functions of money contributing to a renewed form of Gresham's Law. The paper concludes that stablecoins should be treated as non-money assets or, alternatively, be subject to prudential regulation equivalent to commercial banking standards.
