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BIBLIOGRAPHY

Annual Economic Report 2025, Chapter III: The next-generation monetary and financial system

Bank for International Settlements

Claims Supported by This Source

  1. The three tests of money: singleness, elasticity, and integrity.
  2. Stablecoins fail the three tests. Asset-backed types are similar to digital bearer instruments; what is received is a liability of a specific issuer, and since there is no settlement on the central bank's balance sheet, singleness cannot be guaranteed (e.g., red dollars and blue dollars).
  3. The cash-in-advance constraint, requiring full prepayment, undermines elasticity. As bearer instruments on a public blockchain, they become an option for illicit use, and the lack of KYC undermines integrity.
  4. Tension between the promise of constant redeemability at par and a business model that takes on liquidity and credit risks. If they grow, there is a tail risk of a fire sale of safe assets.
  5. Bitcoin began in 2009, but nearly 20 years later, it is not a meaningful currency, is not widely used for payments or as a unit of account, and is best understood as a speculative asset.
  6. A unified ledger, which tokenizes central bank reserves, bank deposits, and financial assets onto a single ledger, is promising.

How to read the verification levels. 'Read' means the material was read in its entirety. 'Bibliography and abstract confirmed' means the bibliographic information and abstract were verified. 'Via course material' means the source was referenced through the main text of a book or a country's monetary history. The text hash is the SHA-256 of the main text from the original source page, excluding tags and whitespace, used to detect if the material has been altered.