Archive
WORKING PAPERS
All working papers published by The Cantillon Institute, organised by series. Each series is the sustained intellectual project of one fellow.
THE DOLLAR DISPLACEMENT THESIS:
COMPLETE WORKING PAPER SERIES
Series One
THE DOLLAR DISPLACEMENT THESIS
What GENIUS and CLARITY Actually Build
The GENIUS and CLARITY Acts do not regulate stablecoins. They institutionalise a private monetary layer beneath the Federal Reserve system, transferring money creation authority to entities with no public mandate and no lender-of-last-resort obligation.
Repercussions of the Dollar Displacement Architecture
The second-order effects of stablecoin dollarisation extend beyond monetary policy transmission. This paper maps the structural consequences for Treasury market depth, Federal Reserve balance sheet composition, and systemic liquidity in stress scenarios.
The Labor Vector: Gig Classification and the Stablecoin Compensation Pathway
Wage payment in stablecoins is not a fintech convenience. It is the mechanism by which gig-economy classification frameworks are extended into the monetary layer, severing worker compensation from regulated banking infrastructure.
The Rate Corridor Under Pressure: IOR, ON RRP, and the GENIUS Act
Stablecoin reserve requirements create a new competing demand for short-duration Treasuries and reserve-adjacent instruments, distorting the Fed's rate corridor mechanics at precisely the moment monetary policy transmission is already compromised.
Two Failures from One Decision: Credit Creation Collapse and the CBDC Foreclosure
The decision to route monetary infrastructure through private stablecoin issuers simultaneously contracts domestic credit creation and forecloses the sovereign digital currency option; two distinct failures that compound in any liquidity stress event.
The Hollow Bank: Regulatory Arbitrage, Competitive Displacement, and the Shrinking Insured System
As stablecoin issuers capture deposit-equivalent functions without deposit insurance obligations, the regulated banking sector faces structural competitive disadvantage; not from innovation, but from regulatory asymmetry that the GENIUS Act codifies rather than corrects.
The Permanent Record: Surveillance, Censorship, and the Architecture of Control in the Stablecoin Payment Layer
Programmable money is not neutral infrastructure. The same technical properties that enable stablecoin compliance also enable payment censorship, transaction surveillance, and the construction of a permanent, immutable financial record for every participant in the system.
The Accelerated Contradiction: Stablecoin Dollarisation and the Compounded Triffin Dilemma
The Triffin Dilemma described the inherent tension between the dollar's domestic and international roles. Stablecoin dollarisation does not resolve this tension; it accelerates it, exporting dollar-denominated monetary instability to jurisdictions with no voice in Federal Reserve policy decisions.
The Invisible Tax: Property Treatment, Compliance Burden, and the Hidden Cost Layer of Stablecoin Adoption
Current IRS property classification of stablecoins imposes a compliance architecture on everyday transactions that is invisible at the point of adoption and catastrophic at the point of audit; a hidden tax on the monetary infrastructure Congress is simultaneously mandating.