Don’t dismiss stablecoins as useless—they tell us something that fiat money cannot
That this wrapper is thin need not concern us for the moment. Demand for ‘stability’ allows us to picture an alternative world of finance. Fiat currencies, backed by nothing more than the word (‘IOU’) of a nation-state, have always embodied a power asymmetry. The history of nation-states and empires is littered with examples of sovereign defaults on obligations or currency debasement, often via hyperinflation. Fiat currencies, and even their gold-backed predecessors, have always been prone to bouts of instability.
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