Stablecoins: The Hidden Key Piece Driving Interest Rates and Global Liquidity
Stablecoins are no longer a theoretical exercise but have become part of the global financial market. With a capitalization exceeding $200 billion and high growth, their impact on the global economy is undeniable. Despite this, they remain excluded from monetary indicators like the M2 Money Supply. This omission is, in our opinion, a technical legacy that must soon be corrected.
Stablecoins meet all M2 criteria: near-immediate liquidity, backing by fiat money like USD, and transactional use. They function as a new layer of private global money, operating in parallel to the traditional system. These assets monetize immobilized assets (like Treasury bonds), increasing the effective monetary base without central bank intervention.
Key Data Points:
- Capitalization exceeds $200 billion.
- Meet all M2 criteria (liquidity, fiat backing, transactional use).
- They monetize Treasury bonds, increasing the effective monetary base.
- Their exclusion may imply recognizing higher inflation.
Institutional resistance to including them in official statistics is not due to a lack of merit, but structural inertia and a possible political dilemma. The expansion of stablecoins represents an evolution in monetary architecture. Ignoring them is a risk; incorporating them into M2 is a necessity.
