Let’s start from the beginning. Before understanding why stablecoins raise questions (and problems), we need to remember what money is. And above all why we all agreed to believe in this fiction.

Because yes, money is first and foremost a collective fiction¹⁶. In film, video games or literature, we talk about the “willing suspension of disbelief”, the concept coined by the poet Coleridge in 1817. The audience temporarily accepts the impossible in order to get into the story. Dragons, spaceships, superheroes, whatever: we believe it for as long as the story lasts.

With money it’s the same, except we never leave the cinema. That scrap of paper in your pocket is intrinsically worthless. Zero. You can’t eat it, heat yourself with it or build a shelter with it. But we have all collectively decided that it is worth something. A currency is a mirror in which a society agrees to see value. As long as everyone looks and sees the same thing, it works. This suspension of disbelief is permanent and universal. Without it, the economy collapses in three seconds.

The economy is nothing but trust.

This fiction has not always existed. Before we believed in it, humanity fumbled around. Humanity started with barter. You have chickens, I have wheat, we swap. Brilliant on paper, a logistical nightmare in practice. I have to want your chickens at exactly the moment you want my wheat. And what if I only want half a chicken? What do we do, split it with a chainsaw? Imagine negotiating your salary in kilos of tomatoes. Annual pay rise: 200 kilos extra, but careful, beefsteak tomatoes only. That is why money was invented.

First seashells, salt, cattle. The word “salary” comes from the salt paid to Roman legionaries, and “pecuniary” from the Latin for livestock. Then precious metals, handy because they are divisible and durable. Finally paper guaranteed by states, lighter to carry than a chest of gold coins. At every stage, we solved problems and created new ones. But at least you could do your shopping without dragging a herd along. Which is a bit of a pain at the Tesco checkout.

A working currency means three roles that have to hold together. If a single one gives way, everything collapses.

1️⃣ Unit of account. Without a common yardstick, there is no way to know whether a flat is worth 10,000 chickens or 50,000. No way to keep accounts, calculate margins or draw up a budget. The problem arises when the yardstick becomes elastic. A coffee at €2 on Monday, €3 on Wednesday, €1.50 on Friday. Try running a business like that. That is why Venezuelans abandoned the bolívar to count in dollars, even without having any¹⁷. In Zimbabwe in 2008, inflation reached 79.6bn% a month¹⁸. Prices doubled every 24 hours. The unit of account had vanished.

This point is crucial because it is geographically subjective. Some may argue that the ECB created €X and that therefore the euro lost €X in value: what matters is how many tomatoes and coffees I can buy with the money from my work. Broadly, a coffee or a baguette keeps a relatively stable price relative to a salary. That would not be the case if, instead of paying in €, I paid in $, £ or BTC: because my seller, for his part, sells in €.

Which brings us to the second one.

2️⃣ Store of value. Money must hold its purchasing power over time. Now yes, the euro targets 2% inflation a year, a target set arbitrarily by New Zealand in 1989, then copied everywhere like a miracle recipe. The idea: push people to invest rather than stash banknotes under the mattress. In theory, wages and growth make up for it. In practice? Eurozone inflation soared to 10.6% in October 2022, while wages rose by 4.7%. The monetary social contract is like New Year’s resolutions: full of good intentions, rarely kept.

But beware the temptation of the printing press. Friedman had a simple formula that hurts: “Inflation is always and everywhere a monetary phenomenon.” Translation: print too many notes to pay off debts, and the currency ends up as toilet paper. Weimar 1923, Germans set off with wheelbarrows of marks to buy bread. Zimbabwe 2008, 100 trillion-dollar notes were used as wallpaper. Venezuela 2018, same recipe. Sargent and Wallace put it into equations in 1981, but the conclusion is still brutal: when the debt becomes too heavy, the state has two options. Default and ruin its creditors, or run the printing press and ruin its citizens. Guess which one they choose most often.

But next to the Argentine peso, with inflation of 211% in 2023, or the Turkish lira, down 80% since 2018, our 2% looks rather mild.

3️⃣ Medium of exchange. The final test: will the baker take your money for his bread? Euros, yes. Dollars, he’ll change them. Seashells, dream on. That is the difference between a real currency and a casino chip: universal acceptance within a given area.

Which is the problem with claiming that a given asset (gold, for example) is a store of value because you cannot issue it indefinitely. Fine, let’s say it is a store of value, but it is much less of a unit of account, and as of today not a medium of exchange.

The Bank for International Settlements, that exclusive club of central bankers who meet in Basel to decide the world’s monetary fate, came up in early 2025 with three modern criteria for currencies. And this is where it gets interesting. Or more slanted, take your pick.

1️⃣ Integrity. In plain English: is this currency mostly used by gangsters? Official currencies have their financial crime squads, their mandatory declarations, their paperwork. Not perfect, but it limits the damage. Cryptos were long the Wild West of money laundering. Today, the paradox is interesting: according to Chainalysis, around $40bn of illicit crypto activity in 2024, but that represents only 0.14% of total on-chain volume (and that is a minimum estimate, you can never trace everything). Meanwhile, the UN estimates that 2 to 5% of world GDP is laundered every year through the traditional banking system, or $2tn to $5tn. Fiat remains the undisputed champion of crime, accounting for 99.8% of illicit flows worldwide according to Europol. And the icing on the cake: even within crypto crime, stablecoins now dominate for dodging sanctions and moving money fast.

2️⃣ Singleness. A working economy needs ONE stable reference, not a bazaar where everyone prints their own scrap of paper. That is the lesson of 19th-century America: when every bank issued its own notes, it was a permanent free-for-all. Today, hundreds of stablecoins exist, but only four or five giants dominate the market. The rest? Noise. Provided, of course, that everyone accepts and recognises the four or five in question.

3️⃣ Elasticity. The money supply must breathe with the economy. Crisis? Pump it in. Overheating? Suck it out. Central banks play conductor, often out of tune, but that is their job. Stablecoins? Zero elasticity. Their supply depends solely on deposits. Full stop. In that sense, their issuers are not central bankers, but banknote printers.

That is why you could speak of an eternal match between public money and private money, one that did not wait for stablecoins.

Public money is the everyday euro. It has its flaws: inflation that nibbles away, the printing press tempting broke governments, botched political decisions. But it has a superpower: compulsory legal tender. Refuse a €50 note in the eurozone? Illegal.

The strength of public money shows in its recent history. Bretton Woods, 1944: the Allies make the dollar the world’s reference, backed by gold. $35 an ounce, set in stone. The whole world believes in it, the dollar becomes king. Until 15 August 1971, a Sunday evening, when Nixon appears on television and closes the gold window. Convertibility is over. Since then, we have lived in a system of pure trust. No more gold, no more metal, just collective faith in pieces of paper. The ultimate magic trick: it has worked for 50 years.

This power of the state over money goes beyond convertibility: it also exists through seigniorage. When the ECB creates a €100 note that costs 8 cents to print, the €99.92 difference goes to the public system. This money-creation income funds the state, cuts taxes, supports public services. In 2023, the Banque de France, the French central bank, paid €4.7bn to the French state. With stablecoins, that seigniorage goes straight into the pockets of Circle or Tether: the plain and simple privatisation of a sovereign revenue.

What gives that note its value is not the paper, it is the state’s ability to levy taxes in that currency and to enforce the law. Crucial point: taxes are paid in euros, not in seashells, not in gold, and certainly not in USDT. It is this tax obligation that creates the fundamental demand for the currency. The state has the monopoly on legitimate violence, as Weber put it, and it uses it to guarantee its currency.

Private money? History is overflowing with its failures. American “wildcat banking” before the Fed: every bank in Ohio printed its own dollars, those from Montana were not worth the same, and regularly everything collapsed. Economists call it the “no questions asked” principle: a real currency is one you never wonder about, whether it is worth what it claims. Private currencies never get there without a public safety net.

Stablecoins are precisely private digital currencies, with the same flaws as their 19th-century ancestors: structural fragility and total dependence on a central issuer. They try to usurp monetary status without its foundations. No social contract behind them, no ability to raise taxes, no monopoly on legitimate violence. Just companies saying “trust us”.

That is the paradox: they have neither the institutional solidity of the euro nor the radical innovation of Bitcoin. Neither the guarantee of the state nor the rigour of code. Just the worst of both worlds with a blockchain veneer.

Between the imperfection of public money and the fragility of private money, humanity seemed condemned to choose its poison. On one side the state that devalues, on the other the banks that collapse. This age-old dilemma seemed insoluble.

Until 2009.