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A new academic report argues that Bitcoin (BTC) and even the U.S. dollar ultimately derive value from collective belief—but warns that stablecoins may be the most fragile link between traditional money and blockchain because they reintroduce the very intermediaries crypto was designed to remove.

The analysis, published in February 2026 by the Centre for Economic Policy Research (CEPR) and LTI@UniTo, a think tank affiliated with the University of Turin, asks whether blockchain can genuinely decentralize ‘money, contracts and finance.’ Lead author Bruno Biais of HEC Paris and other financial economists approach the sector less as a technology story and more as a monetary and market-structure problem, praising crypto’s operational breakthrough while placing stablecoins under the harshest scrutiny.

At the heart of the report is a classic proposition in monetary economics: money has value not because it is intrinsically useful, but because people expect others to accept it tomorrow. The authors describe this as a ‘belief-backed bubble’—a rational bubble sustained by expectations. Importantly, they insist this logic does not stop at crypto.

Quoting Nobel laureate Jean Tirole’s line that “Bitcoin is a pure bubble and if trust disappears its value goes to zero,” the report says the same sentence applies, in theory, to fiat currencies such as the dollar and the euro. The practical difference, it argues, is the presence of a sovereign backstop: states have taxation power, legal authority, and institutions that can coordinate and enforce broad acceptance. Cryptoassets do not. That absence, the authors suggest, is why markets can never fully rule out an extreme “toward-zero” scenario—an uncertainty that helps explain Bitcoin’s persistent volatility.

Still, the report treats Bitcoin’s scale as evidence that decentralization can generate real economic value, not merely froth. It highlights metrics that, in its view, demonstrate resilience: Bitcoin’s market capitalization has at times exceeded 5% of U.S. GDP, Ethereum (ETH) has approached roughly 1%, and the Bitcoin network is supported by tens of thousands of nodes globally. The system’s ability to reach consensus roughly every 10 minutes and prevent double-spending over many years without centralized control is presented as the core achievement that has attracted investor confidence and hardened into market value.

In that framing, crypto’s most credible contribution so far is as a partial ‘store of value,’ particularly in jurisdictions where confidence in central banks is weak or inflation risk is acute. As a ‘medium of exchange’ for everyday payments, however, the report is more skeptical. It points to El Salvador’s experience with Bitcoin legal tender as a cautionary tale for small-ticket transactions, while arguing that blockchain rails can be more compelling in cross-border transfers—an area where legacy banking can be slow and fee-heavy.

This is where stablecoins enter as a seemingly practical compromise: the price stability of fiat with the settlement efficiency of blockchains. Yet the authors call this an ‘inverse’ of decentralization. Most major stablecoins, they note, are not fully decentralized instruments—users must trust a centralized issuer, its governance, its custody choices, and its redemption policies. In doing so, stablecoins revive the ‘intermediary risk’ Satoshi Nakamoto sought to eliminate.

The report emphasizes that these risks are not theoretical. First is reserve concentration. It cites the 2023 episode in which Circle’s USD Coin (USDC) held roughly $3.3 billion of reserves at Silicon Valley Bank, an exposure that many token holders would have struggled to assess in real time. Without U.S. authorities stepping in to protect depositors, the report argues, the stablecoin’s 1:1 peg could have broken decisively.

Second is liquidity mismatch—reserves that look safe on paper but may not be immediately convertible to cash in stress. Tether’s USDt (USDT), for instance, reports large holdings in U.S. Treasuries. But the report notes that securities can be held to maturity or may be costly to liquidate rapidly at scale. If users believe others will redeem first, a reflexive rush to the exit can emerge—economically similar to a bank run—forcing fire sales or delayed payments and potentially disrupting the peg.

Third is contractual control: some issuers reserve the right to delay redemptions, impose limits, or raise fees. Such tools may slow a run, but they shift the burden to users precisely when the promise of instant convertibility matters most. The result, the authors argue, is that stablecoins combine modern payment rails with centuries-old fragilities familiar from banking theory.

The report also flags structural concentration in the stablecoin market, where liquidity and usage cluster around a small number of issuers. While it acknowledges that regulatory regimes such as the European Union’s MiCA framework and U.S. proposals including the GENIUS Act are designed to reduce these vulnerabilities, it cautions that these rule sets are still early in implementation and have not yet been tested across a full stress cycle.

For South Korea, the report’s message lands directly in the middle of a growing debate over a won-denominated stablecoin and the Digital Asset Basic Act. The key question, it suggests, is less about the slogan of ‘fully backed 1:1 reserves’ and more about ‘who issues’—and how that issuer is supervised. Whether issuance is limited to banks or expanded to non-bank corporations, the decisive safeguards are transparency around where reserves sit, the true cashability of those reserves under pressure, and legally enforceable redemption terms.

In the report’s view, if a won stablecoin is meant to improve the efficiency of cross-border settlement, South Korea will need to pair new blockchain infrastructure with rigorous, old-fashioned prudential oversight—reserve disclosure standards, liquidity requirements that reflect stress scenarios, and strict redemption governance. The broader implication is that Bitcoin posed the question of whether money can exist without a state; stablecoins pose a more politically sensitive one: when private entities mint state-linked money outside the state’s direct balance sheet, who ensures the issuer remains safe, liquid, and accountable?

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