Stablecoins could enter M1 or M2, Fed study says

Federal Reserve researchers proposed a framework on Sept. 4 for deciding how stablecoins and other blockchain-based financial products could fit within U.S. money supply statistics. Summary Federal Reserve researchers said payment stablecoins could eventually qualify for inclusion within M1 or M2. Everyday payment use would support M1 classification, while short-term value storage would point toward M2. Tokenized bank deposits already appear within existing monetary aggregates because they remain legally conventional deposits. Retail tokenized money market funds are already included within M2 alongside traditional retail funds today. Stablecoin measurement still faces reporting, reserve double-counting and global circulation problems before any statistical inclusion. Payment stablecoins are not currently included in M1 or M2, but their future classification could depend on how households and businesses use them. The authors, Kristen Payne and Mary-Frances Styczynski, examined payment stablecoins, tokenized bank deposits and tokenized money market funds in a Federal Reserve study. They considered both the economic function of each asset and whether reliable data could be collected w...