Today the Bank for International Settlements (BIS) published a paper comparing stablecoins to tokenized bank deposits. While it unsurprisingly has an affinity to central bank digital currency (CBDC), it also wants to explore private digital currencies. It asserts that stablecoins are similar to the (unstable) era of privately issued bank notes before the creation of the U.S. Federal Reserve.
As evidence, it points to the de-pegging of the Tether stablecoin in the aftermath of the collapse of the FTX crypto exchange and a similar impact on Circle’s USDC when Silicon Valley Bank was shuttered, holding a smallish part of the USDC reserves.
In contrast, the BIS argues that tokenized deposits support the ‘singleness’ of money. In other words, that currency is interchangeable no matter the form.
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