Are Stablecoins Money?

The recent legislative and regulatory developments with respect to stablecoins challenge the pre-existing State-centric legal conception of money due to the decentralised nature of such digital assets. By removing bank intermediation, stablecoins—particularly those which are 1:1 backed by reserves and pegged to a single fiat currency as defined under the Financial Services and Markets Act 2000 (Cryptoassets) Regulations 2025—potentially enhance the efficiency of cross-border payments. For this reason, regulators in the UK and Singapore have sought to facilitate single-currency pegged stablecoins as a peer-to-peer means of payment.  

In a forthcoming article in the Asian Journal of Comparative Law, the author considers how the legal conception of money should facilitate the increasing use of single-currency pegged stablecoins as a means of payment. The article proposes a ‘substance over form’ approach in the characterisation of ‘money’ under the common law. Under this approach, an instrument may be characterised as money if it can serve as an effective means to transfer monetary value between parties, regardless of its legal form or origin, or underlying technology. On this basis, ‘payment-like’ digital currencies that have such functional characteristics, including single-currency pegged stablecoins, may be characterised as money and the functional representation of fiat currency, subject to the regulatory guardrails that allow them to serve this monetary function.  

This distinction between money and non-money is significant because there are different legal consequences depending on whether stablecoins are, or are not, characterised as money in law. If they are characterised as money, the payer’s failure to pay the amount due would entitle the payee to a debt claim, which may be enforced by summary judgment. If they are not characterised as money, the payee would have to pursue an unliquidated claim for damages and mitigate its loss. 

Under the proposed ‘substance over form’ approach, ‘payment-like’ digital currencies such as single-currency-pegged stablecoins should be distinguished from ‘investment-like’ digital currencies like Bitcoin. The former may be tendered to discharge a debt or payment obligation at its nominal value and may, therefore, be characterised as money, while the latter has no nominal value and is more likely to be traded for investment or speculation, and should, therefore, be characterised as securities. This characterisation of single-currency stablecoins, it is argued, would align with the regulatory intent for the use of such instruments as a legitimate means of payment. It would also accord with the classic definition of money in Moss v Hancock [1899] 2 QB 111, as:  

that which passes freely from hand to hand throughout the community in final discharge of debts and full payment for commodities, being accepted equally without reference to the character or credit of the person who offers it and without the intention of the person who receives it to consume it or apply it to any other use than in turn to tender it to others in discharge of debts or payment for commodities.  

Read the author’s article. An earlier version of the article was shortlisted for the Best Paper prize at the 2025 Annual Conference of the Society of Legal Scholars. 

Lance Ang is a Lecturer, School of Law, Singapore University of Social Sciences, and a Research Associate, Centre for Business Research, Judge Business School, University of Cambridge.