How Important is the Singleness of Money?

The singleness of money is that principle that all different forms of money must have the same value at all times and be interchangeable at par and without cost. A criticism of regulators such as the Bank for International Settlements (BIS) and Bank of England (BoE) is that stablecoins may undermine the ‘singleness of money’.

Their concern is that stablecoins, which currently circulate outside traditional payment systems and trade on secondary markets as bearer instruments, can experience deviations from their pegged value and vary in purchasing power relative to their peg currency.

Singleness is not, currently, a formal regulatory objective. However, the concern is that the adoption of digital bearer assets such as stablecoins could lead to departures from singleness that could in turn introduce inefficiencies in exchange and ultimately undermine financial stability could change this.