In Europe, the SEPA instant payments scheme and the various processing and settlement arrangements, including the Eurosystem’s TIPS service, are all in place. TIPS was launched last year and allows transactions to be settled in central bank money across Europe within seconds. The capacity to transfer funds within a few seconds is a powerful one, and it has great potential beyond traditional credit transfers.
Stablecoins aspire to achieve the functions of traditional money without relying on confidence in an issuer—such as a central bank—to stand behind the “money.” For some potential stablecoins, a close assessment suggests users may have no rights with respect to the underlying assets or any issuer.