Stable currencies can make the world a safer place. Regulators should encourage them

Properly regulated and backed by quality reserves, stablecoins—with their instant and simultaneous settlement on blockchains—reduce counterparty risk because obligations are met immediately. From payments to collateral to foreign exchange markets, this undoubtedly improves the safety and soundness of the global financial system. Clearly, today’s foreign exchange settlement system is in urgent need of a technology overhaul, and regulation should encourage the adoption of technologies such as stablecoins that mitigate risk.