Global stablecoin regulation demands systemic cooperation to address structural financial risks and geopolitical asymmetries

Indigenous financial systems, such as the Māori *koha* or the African *tontine*, emphasize communal benefit and risk-sharing over individual profit, directly challenging the extractive logic of stablecoins. These systems have operated for centuries without the need for centralized regulation, demonstrating that monetary stability can be achieved through social contracts rather than technological intermediaries. The erasure of these models in mainstream discourse reflects a broader colonial legacy that devalues non-Western economic thought, treating it as primitive rather than as a sophisticated alternative to financialization.

The rise of stablecoins echoes historical patterns of private money issuance, such as the proliferation of banknotes in 19th-century America that led to financial panics and ultimately the establishment of the Federal Reserve. Similarly, the gold standard’s collapse in the 20th century was precipitated by the inability of private issuers to maintain systemic stability, a lesson that appears to be repeating with the unregulated expansion of algorithmic stablecoins. The BIS’s call for global cooperation mirrors the failed attempts of the 1970s to coordinate monetary policy through the IMF, which ultimately ceded power to private financial actors.

In China, the digital yuan’s state-led approach contrasts sharply with the decentralized, private-sector-driven stablecoin model promoted by Western institutions, reflecting differing cultural priorities around monetary sovereignty and social control. African fintech innovations, such as Nigeria’s eNaira, reveal how digital currencies can be repurposed to address local financial inclusion challenges, but also risk deepening dependencies on foreign technology and capital. Meanwhile, in Latin America, the adoption of stablecoins like USDT has been both a tool for economic survival and a vector for financial instability, highlighting the need for culturally adapted regulatory frameworks.

Stablecoins are not inherently stable; empirical studies show that algorithmic stablecoins like TerraUSD have collapsed under speculative pressure, while asset-backed stablecoins like Tether have faced liquidity crises due to opaque reserve management. The BIS’s emphasis on global cooperation is grounded in the scientific consensus that systemic risks in digital currencies require coordinated oversight, but this ignores the lack of empirical evidence supporting the long-term stability of any stablecoin model. Furthermore, the scientific literature on monetary history demonstrates that private money issuance consistently leads to financial instability without robust public oversight.

Artistic and spiritual traditions often critique the commodification of trust and the fetishization of money as a source of meaning, as seen in Buddhist teachings on *lobha* (greed) or the Christian critique of usury. The rise of stablecoins can be interpreted as a modern manifestation of this spiritual crisis, where technology is used to obscure the moral dimensions of financial speculation. Indigenous art forms, such as the Māori *whakapapa* (genealogical) frameworks, remind us that economic systems are embedded in relational networks, not abstract algorithms.

Scenario modeling suggests that without structural reforms, stablecoins could exacerbate financial fragmentation, with Global South economies becoming dependent on volatile digital assets issued by foreign entities. A more resilient future would involve the integration of decentralized finance (DeFi) with public monetary systems, ensuring that digital currencies serve public goods rather than speculative capital. The BIS’s proposed global regulatory framework risks locking in the dominance of Western financial institutions, while alternative models—such as CBDCs designed for interoperability and financial inclusion—could offer a path toward a more equitable monetary order.

Marginalized communities, particularly in the Global South, are disproportionately affected by the volatility and exclusionary practices of stablecoin systems, yet their perspectives are systematically excluded from global financial policy debates. Women-led cooperatives in Africa and indigenous financial networks in Latin America have developed alternative models of economic resilience that remain invisible to institutions like the BIS. The framing of stablecoins as a technical issue further depoliticizes the power imbalances that make these communities vulnerable to financial exploitation, whether through predatory lending or speculative currency crises.