Stablecoins in 1,000 words - Matt Brown's Notes

Several years ago I backpacked from Berlin to Beijing, covering much of the distance in a third-class car on the Trans-Siberian Railway through Russia and Mongolia. One night I was shaken awake at 3 am on the Mongolian-Chinese border by what felt like a derailment. I jumped out of bed and stared bleary-eyed out the window as railway workers detached each carriage from its wheel assembly and swapped it for one that fit the Chinese railway gauge.

Many countries have different tracks, either by design or historical accident, so many trains require different wheel assemblies to cross borders. Most passengers later woke up in the same carriage they fell asleep in, now traveling through a different country on different rails and wheels.

I thought of that Mongolian railyard often as I started learning about stablecoins 1 . Before that trip, I thought rail cars and their wheels were all the same, all purpose-built for the tracks they ride on, which are more or less the same globally. But that’s not true. Carriages, wheels, and tracks are separate but related elements, are designed and built with various priorities 2 , and are different worldwide.

The same is true of money and the financial infrastructure it’s built on. Neither is valuable without the other, so each is designed symbiotically, resulting in benefits and trade-offs.

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