ECB advisor Jürgen Schaaf's anxious response to the dominance of US dollar stablecoins inadvertently exposes central banking's fundamental flaw: treating money as state property rather than a market phenomenon. As stablecoins prove to be mere digital extensions of failing fiat systems, Bitcoin emerges as the only truly neutral money serving human flourishing over state power.
> “Money is not an invention of the state. It is not the product of a legislative act. Even the sanction of political authority is not necessary for its existence. Certain commodities came to be money quite naturally, as the result of economic relationships that were independent of the power of the state.” — Carl Menger
The Monopolist’s Lament
Jürgen Schaaf’s essay “From Hype to Hazard: What Stablecoins Mean for Europe” reads like a worried confession from a monetary monopoly losing the war for credibility. If the name sounds familiar, it’s because Schaaf previously blessed us with “Bitcoin’s last stand” , a masterpiece of doom-mongering that hit all the greatest hits from the coming Bitcoin induced environmental apocalypse to its dismal failure as a medium of exchange. Now he’s back with another enlightening hot take. As an advisor to the European Central Bank (ECB), Schaaf unwittingly reveals the intellectual bankruptcy of modern central banking through his anxious response to the dominance of US dollar-backed stablecoins.
His panic crystallizes around four predictable claims:
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Threat to Monetary Sovereignty: USD stablecoins risk eroding ECB control, potentially causing digital dollarization
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Financial Stability Risks: Stablecoin integration threatens systemic stability through peg fragility
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Geopolitical Disadvantages: Dollar stablecoin dominance strengthens American hegemony
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Policy Solutions: Europe must promote regulated euro stablecoins and the digital euro (i.e Euro Central Bank Digital Currency)
These arguments ignore money’s market origins and fiat systems’ ethical failures. His concern about USD stablecoin dominance is not unfounded, but his diagnosis is deeply flawed, and his policy prescriptions are worse. Rather than examining the EU’s hostile regulatory environment, Schaaf blames markets, technology, and American innovation. This represents typical bureaucratic behavior of preserving institutional relevance at all costs, while ignoring the writing on the wall in the form of fundamental market signals.
The Fatal Error: Money as State Property
Schaaf’s core mistake lies in treating money as a state tool rather than a market phenomenon. This collectivist conception ignores the fundamental truth that money emerges spontaneously from voluntary exchange, not government decree. His worldview represents central banking’s pathology of conflating institutional monetary socialism with individual sovereignty.
Money, like language or law, must emerge organically from human action. Monopolized money production violates individual rights by denying choice in exchange mediums. What Schaaf fears most, and what Bitcoin enables, is precisely this decentralization of choice.
The ECB thrives on forced usage through legal tender laws, tax coercion, and capital controls. But spontaneous market order inevitably emerges when individuals can converge on the most salable good as money.
The Stablecoin Deception: Fiat in Digital Clothing
Stablecoins represent the latest incarnation of the fiat cult that delivered the 20th century’s inflationary disasters. These aren’t revolutionary innovations but Trojan horses extending fiat’s expiration date, synthetic derivatives of failing currencies issued under state supervision.
Schaaf’s ignorant claim that stablecoins possess “intrinsic value and redeemability” unlike “non-backed crypto assets like Bitcoin” not only reveals profound economic illiteracy but a fundamental misunderstanding of value’s subjective nature as well. Thus perpetuating the false idol of “backing” that haunts fiat apologists.
There is no such thing as intrinsic value. As Ludwig von Mises explained: ”Value is not intrinsic, it is not in things. It is within us.” Value is subjective, emerging from individual preferences, not embedded in objects. Bitcoin holds value because millions recognize its superior monetary properties: scarcity, decentralization, immutability, and neutrality. No central bank approval, no peg, and certainly no “backing” is required.
Second, redeemability is a fiat-era hallucination. Modern currencies aren’t redeemable for anything substantial. Try redeeming your dollars or euros for gold at a central bank and you’ll receive nothing but blank stares (assuming you are not “escorted” out by security).. Fiat money is backed by nothing but faith in bureaucrats and their taxation abilities.
Stablecoins are no different in this regard. In all honesty, what are stablecoins redeemable for? More fiat, debt-based, inflationary paper backed by government credibility drowning in deficits. This creates multiple layers of counterparty risks: the stablecoin issuer, the banking system holding reserves, and the deficit-spending government backing the securities.
Bitcoin doesn’t need “redeemability” because it is the thing. It’s the final settlement layer, money itself, not a promissory note. Like gold before it, only better, Bitcoin is valued for its inherent qualities, not because a government declares it so.
Bitcoin is scarce (21 million maximum), verifiable, divisible, portable, censorship-resistant, and trustless. No third party guarantees its value or custody. It’s non-redeemable because it redeems you from fiat tyranny, central bank fraud, and the myth of money as state property.
Claiming Bitcoin lacks value because it isn’t “backed” resembles arguing email has no value because it isn’t printed on paper. This represents the dying gasp of fiat apologists and Keynesian witchdoctors; a worldview where money is decreed, not discovered; where value is granted, not earned; and where economic truth serves political necessity.
“Backing” isn’t a feature, it’s a trap keeping you tethered to the system Bitcoin was created to escape. Stablecoins aren’t stable; they’re pegged to a sinking ship, maintaining 1:1 backing with inflating dollars. As dollars bleed value through systematic debasement, so do they.
The Oxymoron of “Monetary Sovereignty”
Schaaf’s fear of USD stablecoins dominating euro settlement reveals the real threat: competition. He conflates financial stability with cartel maintenance. If USD stablecoins were truly unstable, they’d fail naturally. Instead, they’re thriving, thus disproving his thesis entirely.
“Monetary sovereignty” is an oxymoron. True sovereignty belongs to individuals making voluntary exchange decisions, not central banks manipulating currency supplies. When Schaaf warns that USD stablecoins might “weaken ECB control over monetary conditions,” he inadvertently reveals central banking’s coercive nature.
The ECB’s euro stablecoins and digital euro aren’t about empowering consumers, they’re about re-centralizing monetary control under slick looking interfaces and Orwellian surveillance. Both CBDCs and regulated stablecoins remove bearer instruments while subjecting all transactions to state scrutiny.
Geopolitical Theater: Monetary Imperialism Rebranded
Schaaf’s third claim, that dollar stablecoin dominance strengthens American hegemony, accidentally reveals the game’s true nature. Ironically his solutions, euro stablecoins and a digital euro, amounts to playing the same game. It’s monetary imperialism repackaged in EU branding. This represents the EU’s desperate attempt to join this race to the bottom rather than opt out entirely
> If only there existed a decentralized, neutral, non-sovereign money the EU could adopt to halt its inevitable decline.
Both systems create monetary colonialism: digital tokens maintaining choice’s appearance while ensuring all roads lead to central bank control. Whether your chains are denominated in dollars or euros matters little when the shackles remain identical.
The GENIUS Act’s licensing monopoly, mandatory surveillance, and federal control create frameworks where stablecoins become CBDCs in all but name. European proposals for regulated euro stablecoins would achieve identical results through Brussels rather than Washington.
The Inevitable Choice: Freedom or Slavery
Schaaf’s essay inadvertently provides the strongest case for Bitcoin adoption. His detailed analysis of stablecoin surveillance capabilities, enthusiasm for programmable money, and advocacy against European monetary alternatives reveal digital fiat systems’ totalitarian implications.
The most revealing aspect of both the GENIUS Act and Schaaf’s proposals is their assumption that monetary innovation must occur within state surveillance frameworks thus creating digital panopticons serving state power.
Schaaf’s enthusiasm for the digital euro project reveals identical objectives. When he describes CBDCs as “robust defense of European monetary sovereignty,” he admits the goal isn’t monetary improvement but enhanced state control. The digital euro would provide unprecedented surveillance with programmable money featuring built-in expiration dates, spending restrictions, and negative interest rates.
The choice facing humanity isn’t between American and European digital currencies, or between stablecoins and CBDCs, but between monetary freedom and monetary slavery. Bitcoin offers escape from this false dichotomy; a truly neutral, global monetary standard serving human flourishing rather than state power.
All fiat systems—traditional banking, stablecoins, or CBDCs—violate property rights through inflation (diluting holdings without consent) and surveillance (violating financial privacy). These violations cannot be legitimized through democratic processes because natural rights exist prior to and independent of government recognition.
Stablecoins and CBDCs represent the old world’s final attempt to prevent monetary evolution through technological camouflage and regulatory capture. They offer innovation’s appearance while preserving monetary authoritarianism’s substance. Their inevitable failure will mark not merely the end of particular policy experiments but the collapse of monetary nationalism itself.
The future belongs to systems serving human beings rather than requiring humans to serve them. In money, as in all human activity, voluntary cooperation produces superior outcomes to coercive hierarchy. Bitcoin embodies this principle in code, making it not merely economically superior but morally imperative.
Money doesn’t need to be “backed”, it needs to be chosen. Millions are choosing Bitcoin not because it’s backed by government promises, but because it’s free from them. Despite regulatory hostility, legal uncertainty, and coordinated media attacks, Bitcoin adoption accelerates across all demographics and regions.
The future is Bitcoin. Everything else is noise.