October 8, 2025
Hoover Institution | Stanford University
Economic Policy Working Group co-organizers John Cochrane and Valerie Ramey hosted a panel on “Stablecoins” featuring four panelists.
Panelists:
Michael Bordo, Hoover Institution Morton Harris Distinguished Visiting Fellow and Board of Governors Professor of Economics at Rutgers University
Darrell Duffie, Adams Distinguished Professor of Management and Professor of Finance at the Stanford Graduate School of Business
Andrew Hall, Hoover Institution Senior Fellow and Davies Family Professor of Political Economy at the Stanford Graduate School of Business
Amit Seru, Hoover Institution Senior Fellow and Steven and Roberta Denning Professor of Finance at the Stanford Graduate School of Business
Moderator: Valerie Ramey, Hoover Institution Thomas Sowell Senior Fellow
Economic Policy Working Group co-organizers John Cochrane and Valerie Ramey hosted a panel on “Stablecoins” featuring four panelists. Stablecoins are cryptocurrencies that maintain a stable value relative to a standard currency such as the dollar or other asset. Michael Bordo started off the panel by drawing lessons from the early monetary history of the US and Canada about the possible problems that could arise with the issuance of stablecoins under the 2025 GENIUS Act. Darrell Duffie provided an overview of how significant demand for stablecoins may grow. Aside from the current application as a medium of exchange in cryptocurrency speculation, stablecoin demand may rise substantially as a substitute for cash in some emerging market economies, and as a medium of exchange for the settlement of wholesale trades of tokenized securities. Currently, there are no foreseeable major stablecoin applications in US retail payments, given the entrenched networks of bankrailed payment services. Amit Seru argued that private stablecoins can potentially deliver on-chain, 24/7 programmable dollars, and cheaper cross-border transactions. However, without credible off-chain reserves, audits, and real on-chain interoperability, runs on the currency might emerge and become a financial-stability risk. Because the GENIUS and Clarity Acts leave gaps in audits and on-chain runs and fragmentation risks, ultimately the most efficient system is likely a government-provided core (potentially including central bank digital currency) to anchor the law, backstops, and standards, with private innovation at the edge. Andrew Hall pointed out that stablecoins were originally meant to create decentralized, censorship-resistant digital cash, but today they are centralized, backed by real-world assets, and required to censor transactions in response to lawful orders. A key question for the future of stablecoins is whether this current approach will help to unlock more decentralized tools in the future, or whether stablecoins will end up looking like central bank digital currencies.
To read Michael Bordo’s slides, click the following link
https://www.hoover.org/sites/default/files/2025-10/1-Bordo.pdf
To read Darrell Duffie’s slides, click the following link
https://www.hoover.org/sites/default/files/2025-10/2-Duffie.pdf
To read Amit Seru’s slides, click the following link
https://www.hoover.org/sites/default/files/2025-10/3-Seru.pdf
To read Andrew Hall’s slides, click the following link
https://www.hoover.org/sites/default/files/2025-10/4-Hall.pdf
To read Michael Bordo’s paper, click the following link
https://www.hoover.org/sites/default/files/2025-10/Bordo_Hoover%20stable%20coins%20paper.pdf
To read Amit Seru’s articles, click the links below:
Can Markets Trust Stablecoins, The Wall Street Journal, July 28, 2025
https://www.wsj.com/opinion/can-markets-trust-stablecoins-finance-investing-economy-policy-c03e0f1d
We really want to Trust Crypto Interests with the Future of Money?, The New York Times, Sept 29, 2025
https://www.nytimes.com/2025/09/29/opinion/cryptocurrency-genius-clarity-stablecoin-digital-dollar.html
