Stablecoins Must Preserve One Form of Money: BlackRock

BlackRock's Nikhil Sharma emphasized that for stablecoins to function as regulated settlement assets, they must remain interchangeable with bank deposits and central-bank money. This principle, known as 'singleness of money,' ensures that different forms of the same currency can be used without disrupting existing banking systems.

'From an investor-optionality standpoint, having different forms of cash is a good thing. But from a recourse, economic exposure, and risk standpoint, singleness of money is an imperative.'

Sharma pointed out that stablecoins are not identical to insured bank deposits, as redemption terms, legal priority, eligible customers, and access to deposit protection can differ by product and jurisdiction.

The GENIUS Act in the US created a federal framework for payment stablecoins, subjecting permitted issuers to reserve, disclosure, and regulatory requirements. The growth of dollar-linked tokens has raised concerns about dependence on dollar payment products in Europe, with European Central Bank Executive Board member Isabel Schnabel supporting the digital euro as a public payment option.