A group of eight leading experts in digital money has released a new paper, published by King’s College London and Qatar Centre for Global Banking & Finance, calling for a re-evaluation of the concept of “singleness of money,” arguing that a rigid interpretation of this principle could hinder the innovative potential of stablecoins. The paper arrives at a time when the global focus on digital assets is intensifying, with developments such as the US’s shifting policy under President Trump, Hong Kong’s December Stablecoin Bill, and the Bank of England’s January update on central bank digital currencies.
The authors—Rhys Bidder, Kene Ezeji-Okoye, Matthew Osborne, Jannah Patchay, Elise Soucie Watts, Varun Paul, Tom Rhodes, and Andrew Whitworth—bring a wealth of expertise from diverse professional backgrounds. Notably, Jannah Patchay is a founding member of the Digital Pound Foundation, while Matthew Osborne, Policy Director EMEA at @Ripple, and Varun Paul, Senior Director for CBDC and FMI at @FireblocksHQ, represent organisations that are also members of the Digital Pound Foundation. Together, their contributions reflect deep connections to and insights from the UK’s evolving digital money ecosystem. All of the authors have contributed to the paper in a personal capacity, and the views expressed therein are not reflective of their organisations and affiliations.
Challenging a Literal Singleness
The principle of singleness asserts that all forms of money within an economy, whether physical or digital, should maintain a one-to-one valuation at all times. However, stablecoins—fiat-backed digital assets designed for price stability—occasionally deviate from this parity. This deviation has led some policymakers to question their suitability for large-scale adoption.
The authors argue for a pragmatic approach to singleness, focusing on stability in value rather than strict adherence to parity. They outline regulatory measures and design improvements to bolster confidence in stablecoins while preserving their innovative features, including enhanced competition, financial inclusion, and utility in a cashless society.
A Proportionate Regulatory Approach
The paper highlights that deviations from monetary singleness already exist within the traditional financial system, such as limited cash access or digital payment barriers. These issues are mitigated through extensive regulatory frameworks, which the authors suggest could be adapted to stablecoins. Key recommendations include:
- Asset Backing and Redemption Rights: Regulators should enforce stringent standards for the types of assets backing stablecoins and the proportion redeemable at any given time, ensuring reliable exchangeability with other forms of money.
- Redemption Mechanisms: Measures to prevent costly or slow redemption processes and ensure issuers maintain adequate reserves to meet redemption demands.
- Crisis Liquidity Support: Establishing facilities akin to traditional deposit insurance, such as the UK’s Deposit Guarantee Scheme, to support stablecoin value stability during crises.
Building Confidence in Stablecoins
“Policies that reinforce the soundness of the issuer and the reliability of redemption will promote the stability of the stablecoin’s value and thereby its singleness,” notes Elise Soucie, Executive Director at Global Digital Finance. Her remarks echo the paper’s emphasis on trust in backing assets as essential to fostering widespread stablecoin adoption.
The authors argue that “acknowledging the realities that apply to the ideal of singleness,” as stated by Jannah Patchay, could allow stablecoins to better meet the needs of businesses and consumers. Similarly, Varun Paul highlights the need for balance, noting that “regulators must ensure financial stability without stifling the innovation that stablecoins bring to an increasingly digital economy.” Matthew Osborne adds that “a forward-thinking regulatory approach can empower stablecoin issuers to innovate while maintaining the fundamental stability required for confidence in the financial system.”
A Call for Thoughtful Regulation
The authors present a vision of stablecoins that are both well-regulated and adaptable, capable of delivering the benefits of new functionality, competition, and inclusion. Their paper serves as a significant contribution to the debate on stablecoin regulation, urging policymakers to rethink singleness as a guiding principle in a rapidly evolving digital economy.
While the views expressed in the paper are those of the authors and not their organisations, the paper’s release highlights the pressing need for collaboration between regulators, industry leaders, and innovators in shaping the future of money.
Click here to download the full paper on the King’s College London website.
