Stablecoins must remain interchangeable with commercial-bank deposits and central-bank money if they are to operate as regulated settlement assets, BlackRock’s head of digital assets Nikhil Sharma said.
Speaking during a panel at the European Blockchain Convention’s Day 1 media briefing, Sharma said the key principle was the “singleness of money” – ensuring different forms of the same currency remain exchangeable at face value.
That would require banks to recognise stablecoins, convert them into deposit liabilities and provide clear claims and recourse to users. Central banks could then provide the final settlement layer using fiat money or wholesale central bank digital currencies (CBDCs).
“If you have a dollar stablecoin and you want to pay somebody, their bank needs to accept that stablecoin and turn it into a deposit liability,” Sharma said. “You need to have a final settlement layer – and that potentially sits with central banks.”
He said stablecoins, commercial-bank deposits and central-bank money each carried different risks. A deposit is a liability of the bank, while a stablecoin is a claim determined by its issuer and governing terms. Central-bank money is a direct claim on the monetary authority.
Users therefore rely on a stablecoin issuer’s reserves, custody arrangements and ability to meet redemptions. A token designed to track one dollar can still trade below that value if liquidity problems or doubts about its backing emerge.
Philipp Muller of the Swiss National Bank said commercial banks could issue stablecoins, but the central bank had to provide a secure payment method for regulated institutions.
“That could be wholesale CBDC, it could still be fiat money. Only time will tell,” Muller said.
In the United States, the GENIUS Act, enacted in July 2025, established federal rules for payment stablecoins. Only permitted issuers can issue them in the country, subject to reserve, disclosure and regulatory requirements.
Most major stablecoins track the US dollar and hold reserves in cash, Treasury bills or similar liquid assets. Their expansion could increase demand for US government debt, while also extending dollar access beyond banking hours and across borders.
European Central Bank Executive Board member Isabel Schnabel has said dollar-backed stablecoins could strengthen the dollar’s international position as the market approached $300bn. Euro-denominated stablecoins remained a small part of the sector. She backed the digital euro, with a pilot expected in 2027 and possible issuance readiness targeted for 2029.
Sharma said tokenised securities made reliable settlement cash more important because blockchain trading could continue while banks, foreign-exchange services and payment systems operated limited hours. A recent examination of the weekend dollar funding gap found that always-open tokenised markets could face liquidity pressure when conventional dollar rails were unavailable.
During another Day 1 panel, ARK Invest’s Lorenzo Valente estimated the digital-asset market at about $3tn, including roughly $300bn in stablecoins and $30bn-$40bn in tokenised assets. He said institutional participation had increased as the sector developed stronger tools, privacy and compliance controls.
Sharma’s proposed structure would combine bank acceptance, interoperability between tokenised deposits and stablecoins, and central-bank-supported final settlement without disrupting existing banking systems.
