BlackRock Stresses Interoperability and “Singleness of Money” for Stablecoins

BlackRock’s head of digital assets, Nikhil Sharma, told participants at the European Blockchain Convention that stablecoins can only function as regulated settlement assets if they remain interchangeable with traditional bank deposits and central‑bank money. He framed this requirement as the “singleness of money” – the principle that different forms of the same currency must retain equal face‑value and clear claim, backing, access and recourse.

Bank Acceptance and Deposit Conversion

Sharma explained that a stablecoin payment must be recognized by the recipient’s bank, which would then convert the token into a deposit liability. This conversion would preserve the value of the payment and provide the same legal recourse as a conventional cash transfer.

Final Settlement Layer

According to Sharma, the ultimate settlement of obligations between regulated institutions should occur in central‑bank money or a wholesale CBDC. This layer would ensure that inter‑bank transfers settle without disrupting existing banking systems.

Risks Across Different Forms of Cash

While investors may benefit from multiple digital cash options, each carries distinct economic exposure and redemption structures. A commercial‑bank deposit is a direct liability of the bank, a stablecoin is a claim against its issuer, and central‑bank money is a claim on the monetary authority. Liquidity pressure or doubts about backing can cause stablecoins to trade below their peg, even if they are designed to track a single currency.

Regulatory Context

In the United States, the GENIUS Act governs permitted payment stablecoin issuers, imposing reserve, disclosure and regulatory requirements. European officials have highlighted concerns about reliance on dollar‑linked stablecoins and are pursuing a digital euro pilot, with issuance targeted for the late 2020s.

Infrastructure Requirements

Sharma emphasized a layered approach: first, banking systems must accept stablecoins; second, interoperability between tokenised deposits and stablecoins must be established; third, a settlement infrastructure backed by central‑bank liquidity must complete the process. He noted that this could be achieved in a “potentially unintrusive way,” though no specific technical model was detailed.