Stablecoins: Rejected for All the Wrong Reasons

The latest report from the Bank for International Settlements (BIS) makes a few surprisingly bold claims about why stablecoins fail the key tests that define what qualifies as “money.”

First, stablecoins supposedly lack the price stability required to serve as real money. But let’s be honest - do central bank currencies always deliver that kind of stability? Plenty of countries would disagree.

Second, stablecoins are said to depend on their issuers. And fiat money doesn’t? If a central bank goes down, it will absolutely impact the value of its currency.

Third, stablecoins don’t always meet AML/KYC standards. Sure. But do cash payments always meet them? What about physical banknotes?

And finally, stablecoins require full backing, which BIS presents as a disadvantage. That’s the most puzzling point. We all know central bank money isn’t fully backed - but calling that a feature of good money? Really? Would anyone be thrilled to get paid in something that isn’t fully backed?

Let’s be clear: stablecoins aren’t real money not because of these technicalities, but because no one is required to accept them. Central bank money is legal tender - people have to accept it.

But even that doesn’t make stablecoins inferior. They aren’t accepted by force - they’re accepted by choice.
For example, on rabbit.io, you can always exchange stablecoins for thousands of different crypto assets. And many people are doing exactly that - by choice.