US Stablecoins Threaten Digital Euro, BIS Says, Fail as Money
Stablecoins have many positives, but the hype downplays the negatives
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Topics:
Barbarians at the Gate: US Stablecoins Challenge the Digital Euro
BIS 2025 Annual Report: Why Stablecoins Fail as Money
Tokenization & Stablecoins Fail Without Liquidity
Banks Lose Deposits as Neobanks Surge
Citi: West Rushes to Catch Asia's Decade-Long RTP Boom
Bonus Read: WEF: Top 10 Emerging Technologies of 2025
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Welcome,
Today, I’m leading off with two thought-provoking articles that I wrote about the less desirable characteristics of stablecoins.
These are important reads because, with all the hype surrounding stablecoins, it’s essential to acknowledge both their shortcomings and their benefits.
The first article is my opinion piece, addressing how the EU and ECB are less than thrilled about the US digitizing the dollar with stablecoins.
I hope you enjoy it because what hasn’t received enough press is how the EU now faces a long-term risk of losing monetary sovereignty if even a small part of the EU economy were to dollarize with stablecoins.
While MiCA and the digital euro are the EU’s best lines of defense, it needs to do more to repulse the “Barbarians at the gates!” Adding this to tariff negotiations, it becomes clear that EU-US relations are anything but smooth.
Matching the EU’s less than cheery attitude is the BIS, which doesn’t mince words about stablecoins and says flat out that they “cannot be the mainstay of the future monetary system.”
This is an important read that counters the hype surrounding stablecoins. My take is that the BIS isn’t wrong, but “mainstay” is too high a bar. Stablecoins can indeed be useful without being a “mainstay.” Still, if you get the idea that Europe is not fond of stablecoins, you are correct.
So everyone will just buy tokenized assets and stablecoins because they are so great, right? Wrong!
Assuming that a two-way market for tokenized assets will magically materialize is a major error. Liquidity is everything, and with an asset potentially tokenized ten different ways, on ten different chains, we face a real liquidity issue. Will all stablecoins be equally liquid? No way, no how.
Remember when banks said neobanks didn’t matter and that they wouldn’t impact them? Well, they were wrong; neobanks are growing so quickly that they are attracting deposits from incumbents. Who would have guessed that incumbents would underestimate the threat?
Finally, we have a wonderful Citi GPS report on real-time payments (RTPs). The irony is that Asia knows more about RTPs than anyone, so it is amusing to see Citi now try to convince a Western audience that they should have them. Citi is a decade late to the party and should have read my book, Cashless!
Thanks once again for reading. I appreciate each and every one of you taking the time to open your inbox for me!
Rich
PS
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Barbarians at the Gate: US Stablecoins Challenge the Digital Euro
The digital euro and MiCA regulations are key parts of the EU's defense
The EU’s monetary sovereignty is under attack by US dollar stablecoins. While the EU’s regulatory walls and digital euro may offer protection for now, in the long term, the EU must address the barbarians at the gate.
Let’s be clear from the start, the EU would be much happier if the US issued a central bank digital currency (CBDC) rather than a stablecoin.
Read on to see why the US isn’t doing the EU any favors……
BIS 2025 Annual Report: Why Stablecoins Fail as Money
The BIS should remember that "Perfect is the enemy of good."
The BIS’s 2025 Annual Report hammers stablecoins, declaring that they: “do not stack up well against the three desirable characteristics of sound monetary arrangements and thus cannot be the mainstay of the future monetary system."
Tokenization & Stablecoins Fail Without Liquidity
Why do so few bother even to mention that liquidity is key?
Amidst all the hype surrounding tokenization and stablecoins, you don’t hear many people discussing liquidity, and that’s a problem because it is the most critical factor determining their success.
Read why liquidity is everything in markets and that assuming it will exist is a major error….
Banks Lose Deposits as Neobanks Surge
A few years ago incumbents thought this was impossible. They were wrong!
This is a great read from Mambu that discusses how bank deposits, the lifeblood of all banks, are at risk from neobanks and other fintechs.
It seems only a few brief years ago that incumbents scoffed at neobanks and thought they were never going to catch on.
Read why incumbents were so wrong!!
Citi: West Rushes to Catch Asia's Decade-Long RTP Boom
I'm glad to see the West copying tech that is "Made in Asia."
Citi’s report on real-time payments (RTPs) is a “must-read” that preaches their economic benefits, a concept that Asia has been aware of since 2014!
Citi is strongly in favor of RTPs, claiming that they are no longer an emerging technology but the default. Moreover, Citi is adamant that wherever RTPS go, they bring inclusion, economic development, and real GDP growth.
Read why this is news to Citi and the West, but Asia has been living this for a decade!
Bonus Read
WEF: Top 10 Emerging Technologies of 2025
For today's "Bonus Read" I picked something that was NOT fintech, banks, or AI, but is even bigger!
The WEF's Top 10 Emerging Technologies have the potential to "reshape industries and societies."
Big enough for you?
This is why this is a bonus read worthy of your time! I also picked it because there was tech on the list I had no clue existed!
Maybe you'll find a few new technologies yourself.
AI fans should head directly to No. 10 GenAI watermarking. This will be big, and it has to work as AI content is out of control!
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Stablecoins: Taking the Next Step
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