The Use and Regulation of Stablecoins in Payments

Stablecoins offer open and global payment infrastructure. Their model and the underlying technology have inspired numerous private and public initiatives. However, regulating them as instruments of payment requires striking a certain balance. This paper analyzes the current state of stablecoins and their potential evolution by proposing two ways they could be regulated. The first is to turn to incremental frameworks. Stablecoins are emerging ventures, which have not been widely adopted and whose technology lacks maturity, but which have the potential to reach systemic significance. The second is to establish specifically technological frameworks. Stablecoins rely on infrastructure that is shared with peripheral intermediaries. The best way to safeguard the integrity of payments and to protect consumer interests requires creating tailored regulation with revamped and diversified responsibilities.