Stablecoins, Stability, and Financial Inclusion

The promise of providing financial services to underserved communities around the globe is a key motivation for our work, and we’ve been concerned by a counterintuitive trend that’s taken root in Western economies over the past few decades. A growing share of GDP is flowing to the finance sector , but millions remain shut out of basic financial services. Meanwhile, in much of the rest of the world, Chinese fintech has emerged as a leading contender for banking the unbanked. A growing chorus of voices ranging from Senators Cynthia Lummis and Pat Toomey on the right to Senators Elizabeth Warren and Kyrsten Sinema on the left are acknowledging that digital currency may be a powerful tool to help get “more people into the system.” 

Stablecoins — privately-issued cryptocurrencies that are pegged to a stable asset such as the U.S. dollar — have an important role to play in the next generation of democratized financial services. The total supply of stablecoins has increased from $20B to more than $125B over the past year. Naturally, this staggering growth has prompted interest from lawmakers and regulators. America’s technological and financial edge has always depended on business leaders and policymakers collaborating to ensure that the private sector can experiment and build, while appropriate regulatory regimes help to manage the real downside risks that might otherwise harm consumers. 

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