Stablecoins are breaking singleness

A dollar at Chase and a dollar at SoFi and a dollar at Bank of Bird-in-Hand have the same value. The value of my dollar doesn’t change depending on which bank account I use. They might have slightly different ACH or Wire fees, but I don’t have to worry about a floating exchange rate that depends on the liquidity or ubiquity of the different banks.

This property is “singleness”: different forms of money denominated in the same currency exchange and are spendable at par. Make no mistake, a deposit at Chase, a deposit at SoFi, and a deposit at Bank of Bird-in-Hand are all different dollars, but it doesn’t feel like they are – this is singleness working.

Stablecoins don’t work this way today. If my landlord wants to be paid via PayPal in PYUSD (PayPal’s native stablecoin), the amount of USDC vs SOFID (SoFi’s stablecoin) vs BirdUSD* I need to send will vary – based on size, liquidity, blockchain, and market rate of each asset at the time of transaction.

This is singleness breaking. Until stablecoins are united with the rest of the money supply – they share singleness with other forms of dollars/fiat – they won’t be usable as “good money.” 

Achieving singleness in fiat

Understanding how singleness was achieved in the US (and broadly similar in other countries) in fiat is instructive for how we get there with stablecoins. Three institutional pillars allow us to treat different dollars as fungible across platforms.

1. The Central Bank Anchor. The Federal Reserve provides a common "base money" (reserves) that acts as the ultimate settlement asset. Because private banks can exchange their deposits for these reserves at a 1:1 ratio, all "brands" of bank dollars are tethered to the same anchor.
2. Prudential Oversight. To ensure banks can always meet their "at par" promises to depositors and counterparties, they face strict rules on capital and liquidity. This oversight ensures that private bank money remains "information-insensitive." Meaning, customers trust the regulatory framework and don't need to audit a bank's balance sheet before accepting that the bank is good for the money.
3. The Public Backstop. Finally, FDIC deposit insurance socializes the risk of bank failure if pillar two fails. FDIC insurance provides a government guarantee that deposits up to certain limits will be honored even if the depository bank fails. Practically, this insurance backstop helps prevent bank runs and liquidity crunches and therefore adds stability and confidence to bank money.

Singleness in fiat is a hard-won, carefully crafted institutional achievement, not a market accident.

The GENIUS Act: necessary but not sufficient

The GENIUS Act, passed in summer 2025, was the first step toward replicating this institutional foundation of singleness for stablecoins. It creates a framework to support individual stablecoins maintaining their peg at one dollar through reserve requirements, transparency obligations, and regulatory oversight.

But GENIUS addresses only the first-order problem: ensuring that any single compliant stablecoin can be trusted as a dollar in isolation. It does not create singleness between stablecoins and between stablecoins and fiat. When a user needs to move between stablecoins, or between stablecoins and fiat, they must rely on market operations: exchanges, AMMs, OTC desks. These mechanisms introduce slippage: a departure from an asset being exchanged at par. Slippage breaks singleness.

"At par": the difference between fees and slippage

To understand where singleness breaks with stablecoins, it is important to understand the two types of costs a user may incur.

Fees are transaction-based costs: a swap fee from an exchange, interchange from a card network, a wire fee from a bank. Fees are predictable, disclosed, and represent payment for a service.

Slippage is a market-based cost driven by supply and demand. When you swap USDT for PYUSD on an exchange, either currency may be valued at more or less than a dollar depending on available liquidity for that transaction. Slippage is variable, opaque, and represents a loss (or in theory gain).

In developed economies, when remaining in the same currency denomination, slippage exists only with stablecoins. It does not exist in fiat transactions. When you wire dollars from Chase to Bank of America, you don't lose value based on each bank’s liquidity. The dollars arrive at par, always. 

Today, converting between stablecoins does not work like money. Instead, it relies more on market-based operations that more closely mirror stocks, commodities, or intercurrency trades (FX). As more blockchains are used for payments (there are already ~7 with significant volume) and more companies launch stablecoins, liquidity will fragment further. The problem will get worse until it is fixed.

And until this is fixed – until stablecoin fungibility functions like money and not stocks or commodities – real payments adoption with stablecoins will be stunted.

Why singleness matters

Cost. Even modest slippage can make stablecoin transactions more expensive than traditional rails. An ACH costs pennies. If converting between stablecoins to complete a payment incurs 10 basis points of slippage, which is common even for liquid pairs, stablecoins can lose their cost advantage.

Predictability. More important than cost is predictability. Several well-established theories from behavioral economics help explain why certainty and predictability are critical to the importance of singleness of money.

Uncertainty aversion (Gneezy et al.) shows that people strongly dislike unknown outcomes, even when the expected value is favorable. Unlike a fixed fee, slippage is unpredictable. Loss aversion (Kahneman & Tversky) demonstrates that losses feel roughly twice as painful as equivalent gains. Slippage feels like a loss because…it is – slippage results from a trade where the sold asset is valued below par rather than a payment for service. Reference dependence (also Kahneman & Tversky) suggests people evaluate outcomes against expectations. We expect payments to execute at par because that's how fiat works. Stablecoin slippage violates this expectation.

These concepts formalize what we already know intuitively. Paying $4 for coffee one day and $5 for the same coffee the next because of slippage is a terrible experience. For larger transactions, it's untenable. 

Additionally, companies need pricing certainty to build and price their products. If there is unpredictable slippage, this not only creates UX challenges for builders, but can actually break unit economics for their products. Mastercard and Visa offer stablecoin settlement for faster and more frequent settlement, but they only take a few basis points on each transaction. If they experience slippage when converting out of accepted stablecoins, this can quickly turn their unit economics negative.

Tax and Accounting. Businesses often have to treat stablecoins as financial instruments rather than cash equivalents. They “bought” a stablecoin for $0.999 and “sold” it for $1.001. They made $0.002! But they also may need to book this as a gain. At scale, this is unmanageable for most companies. Just holding stablecoins can be similarly complex. Temporary price fluctuations can force balance sheet write-downs. Auditors may have to discount holdings based on exit liquidity. Tax and accounting rules are still being written for stablecoins. With singleness, stablecoins are treated as cash or cash equivalents because they finally are. 

Is singleness necessary?

For global, scaled money movement, it is. Stablecoins have gained traction today in payments primarily where the singleness problem has been effectively hidden or removed.

Cross-border corridors that involve currency conversion (FX) lack singleness by definition. Converting dollars to pesos incurs variable FX costs. Slippage is expected. Stablecoin transactions that also involve FX can more easily hide the stablecoin slippage in the overall transaction which already has a variable market-based cost from the FX component. 

Closed ecosystems offer functional singleness within their boundaries. USDT on Tron, for example, supports significant payment volume across various applications. Transactions are occurring on the same chain in the same stablecoin, so there is no slippage. Users stay inside the silo which has built some degree of network effects, and the singleness problem disappears within that walled garden. 

The pattern is clear: stablecoins succeed where slippage is either expected or absent. Stated differently, feature parity plus improvements from stablecoins is necessary for adoption. For stablecoins to break out of these niches and compete with fiat more broadly, stablecoins need to be broadly integrated into the singleness of money we have with fiat.

Conclusion

Stablecoins have the potential to become not just viable money, but better money: cheaper, faster, global, and programmable. But they cannot fulfill that potential without singleness.

The GENIUS Act laid essential groundwork by establishing trust in individual stablecoins. The next challenge is creating singleness between them, ensuring that moving from one compliant stablecoin to another, or between stablecoins and fiat, happens at par rather than at the mercy of market dynamics.

This isn't a problem that better AMM design or more efficient aggregators will solve. Those approaches optimize around the flaw rather than fix it. What's needed is institutional infrastructure: the stablecoin equivalent of the settlement and clearing systems that make fiat fungible.

The technical and regulatory pieces are falling into place. The missing layer is clearing infrastructure to connect them.