Assessing Whether Stablecoin Velocity Translates into Economic Impact VISA)
VISA’s Ezechiel Copic argues that raw stablecoin velocity is a misleading proxy for “economic relevance” because it mostly reflects wholesale‑style financial activity rather than retail spending, so it must be benchmarked against Fedwire‑like turnover rather than M1. It explains that traditional M1 velocity measures how often money is used for purchases of goods and services, whereas total stablecoin velocity—calculated as on‑chain transaction volume divided by circulating supply—captures predominantly trading, settlement, and funding flows. When filtered to transactions of 250 dollars or less as a rough stand‑in for retail payments, stablecoin “retail” velocity is far below U.S. M1 velocity, implying minimal use in everyday commerce. But when compared to a financial‑system benchmark based on Fedwire transaction value relative to reserve balances, stablecoin velocity is still much lower in scale, indicating that while stablecoins show growing importance in financial markets, they remain modest relative to established wholesale infrastructures. Overall, the piece concludes that interpreting stablecoin data requires distinguishing retail from financial‑system use and recognizing that current stablecoin impact is concentrated in the latter. [VISA]
Is the Digital Euro a Solution in Search of a Problem? (Banque de France)
Second Deputy Governor of the Banque de France Agnès Bénassy-Quéré argues that the digital euro responds to Europe’s strategic dependence on Visa and Mastercard and rising card fees, not an abstract techno-fix. Bank cards dominate non-cash payments, yet many euro-area countries lack national schemes and rely entirely on US networks, giving them leverage over European users and pricing. Instant transfers exist but are under-used in retail due to weak commercial front-ends. Bénassy-Quéré argues that the digital euro, rolled out euro-area wide as legal tender, can break network effects, underpin a sovereign infrastructure, and complement private solutions like Wero and EuropA within unified wallets, improving resilience and autonomy. [Banque de France]
FYI I produce a monthly digest of digital fiat currency (DFC) developments exclusively for the official sector (e.g., central banks, ministries of finance and international financial institution (e.g., the BIS, IMF, OECD, World Bank)) plus academics and firms that are active in the DFC space (commercial banks, technology providers, consultants, etc.). (DFCs include central bank digital currency (CBDC), stablecoins and tokenized deposits.) It goes out via email on the first business day of every month, and if you’re interested in being on the mailing list, please email me at john@kiffmeister.com.
