Federal Reserve researchers propose framework for stablecoin inclusion in money supply

How stablecoins resemble traditional money in function

Federal Reserve researchers introduced a framework on September 4, 2026, to determine how payment stablecoins and other blockchain-based financial products could be classified within U. S. money supply statistics such as M1 or M2. The proposal aims to clarify whether these digital assets should be counted alongside traditional forms of money in official economic measures. The study was conducted by Federal Reserve staff and shared internally before being made public.

The researchers argue that payment stablecoins, which maintain a stable value typically pegged to a fiat currency like the U. S. dollar, function similarly to demand deposits or other liquid assets already included in M1. They suggest that if stablecoins are widely used for payments and readily convertible into cash, they could logically belong in M1. Alternatively, if held more as a store of value than for immediate transactions, they might align better with M2, which includes savings deposits and other near-money assets.

The framework evaluates stablecoins based on three criteria: liquidity, usability in transactions, and stability of value. Researchers noted that major payment stablecoins already demonstrate high turnover in digital commerce and remittances, resembling the velocity of money seen in checking accounts. They emphasized that inclusion in money supply metrics would improve the accuracy of economic indicators, especially as digital payments grow. One researcher stated, „If it acts like money and is used like money, it should be measured like money.” Should regulators treat stablecoins as bank deposits? The proposal raises questions about regulatory consistency, particularly whether stablecoin issuers should face similar reserve requirements or reporting standards as banks if their products are counted in official money aggregates. Researchers acknowledged that current reporting gaps make it difficult to track stablecoin usage comprehensively. They recommended improving data collection from issuers and exchanges to support accurate measurement.

The Federal Reserve has not yet decided whether to adopt the framework officially but said it will continue studying the implications for monetary policy and financial stability.

Frequently Asked Questions

What is the difference between M1 and M2? M1 includes the most liquid forms of money, such as cash and checking deposits. M2 adds savings accounts, small time deposits, and retail money market funds, representing broader liquid assets.

Why might stablecoins be included in money supply measures? If stablecoins are used widely for payments and maintain stable value, they function similarly to traditional money and could improve the accuracy of economic data tracking.

Would counting stablecoins affect inflation or interest rate decisions? Potentially, if significant volumes are included, it could alter perceptions of money supply growth, though researchers stressed this would depend on actual adoption and usage patterns.