Bundesbank paper finds widespread stablecoin adoption modestly cuts long-run US output

A Bundesbank discussion paper builds a quantitative macro model, calibrated to the US, to ask what happens when stablecoins scale to USD 1-3 trillion. The authors isolate a bank lending channel and a fiscal space channel pulling in opposite directions, and show how reserve regulation changes the result. Useful for anyone mapping the deposit-displacement and Treasury-demand arguments now shaping stablecoin rulemaking.

• Model predicts a modest long-run US output decline as the bank lending channel slightly outweighs the fiscal space channel.
• Reserve design is decisive: bank-deposit backing worsens output, central-bank reserve backing strengthens fiscal space; foreign demand helps.
• Transition can be expansionary because the fiscal channel acts faster, and stablecoins amplify monetary policy shocks via bank funding costs.