The Triple Dilemma of Stablecoins and Their Future Direction

Stablecoins, as an important innovation in the digital asset field in recent years, play the role of a "safe haven" in the volatile cryptocurrency market due to their characteristic of value stability, and gradually become the infrastructure for decentralized finance and global payments. However, the Bank for International Settlements (BIS) issued a stern warning about stablecoins in its economic report in May 2025, pointing out that they may pose systemic risks.

The BIS proposed the "triple gate" theory of currency, which includes uniqueness, elasticity, and completeness, believing that stablecoins face severe challenges in these three aspects:

The Dilemma of Uniqueness: The Uncertainty of Value Stability

The value anchoring mechanism of stablecoins has inherent flaws and cannot fundamentally guarantee a 1:1 exchange with fiat currency. Its trust is derived from the commercial credit of private issuers and the quality of reserve assets, rather than national credit, thus facing the risk of "decoupling". The recent collapse of the algorithmic stablecoin UST is a typical case.

The Tragedy of Elasticity: The Limitations of 100% Reserve

Stablecoins that claim to be backed by 100% highly liquid assets actually represent a "narrow bank" model, completely sacrificing the "elasticity" of money. This limits their ability to support economic growth and may even lead to credit tightening in the traditional banking system.

Lack of Integrity: Regulatory Challenges Brought by Anonymity

The anonymity and decentralization characteristics of stablecoins make it difficult for traditional financial regulation to be implemented, providing convenience for illegal fund flows. This stands in stark contrast to the traditional regulatory model based on intermediaries, becoming a major concern for regulatory agencies.

In addition, stablecoins face challenges such as technical vulnerabilities and real impacts on the financial system. Their high dependence on the internet and blockchain networks makes them susceptible to network interruptions or attacks. At the same time, the expansion of stablecoins may lead to a loss of bank deposits, affecting the operation of the traditional financial system.

In the face of these challenges, the BIS proposed a "unified ledger" solution based on central bank currencies, commercial bank deposits, and government bonds that are "tokenized." This solution aims to harness the advantages of tokenization technology while maintaining financial stability.

However, the evolution of the market may be more complex. In the future, stablecoins may show a differentiated trend: some will actively embrace regulation and become regulated digital payment tools; others may choose to operate in regions with relatively loose regulation, continuing to serve specific niche markets.

The development of stablecoins reveals both their structural deficiencies and the shortcomings of the existing financial system. Future financial innovations may need to seek a balance between prudent regulation and market innovation to build a more efficient, secure, and inclusive financial system.