How Stablecoins Will Transform Banking | Charles Calomiris

In Episode 438 of Hidden Forces, Demetri Kofinas speaks with Charles Calomiris, former Chief Economist at the Office of the Comptroller of the Currency, about his forthcoming paper “How Stablecoins Will Transform Banking,” which is based on a presentation he delivered at the Hoover Institution’s annual monetary policy conference this past May. Demetri and Charles spend the first hour of their conversation laying out what stablecoins are and why Calomiris believes they are poised to transform our standard units of account through a revolution in real-time payments and a wholesale reinvention of the banking system, monetary policy, and the role of the dollar internationally. They discuss the significance of the recently signed “Genius Act,” explore the importance of bank charter modernization, and consider the broad public benefits of separating loans from deposits—ranging from faster, programmable settlement and greater competition in financial services to a reduction of systemic risk in areas where bank lending has become increasingly overconcentrated. The second hour is devoted to exploring some of the most important short- and long-term implications of stablecoin adoption, including: (1) Antitrust concerns over natural monopolies and network effects in stablecoin payment rails. (2) Near-term boost to demand for U.S. government debt, including the potential issuance of tokenized bills for gross real-time settlement. (3) Longer-term prospect of moving away from the dollar as the primary unit of account toward consumer bundles tied to assets, goods, and services that better reflect people’s spending patterns—along with the implications for monetary policy, seigniorage, capital flows, and the preservation of purchasing power in these new currencies. You can subscribe to our premium content and access our premium feed, episode transcripts, and Intelligence Reports at https://hiddenforces.io/subscribe. If you want to join in on the conversation and become a member of the Hidden Forces Genius community, which includes Q&A calls with guests, access to special research and analysis, in-person events, and dinners, you can also do that on our subscriber page at HiddenForces.io/subscribe. 00:00 Introduction 03:10 Background on the How Stable Coins Will Transform Banking 03:37 Hoover Institute Presentation 04:16 Financial Innovations Panel 05:23 Modernizing the Bank Charter 06:20 Political Resistance to Stable Coins 09:09 Blockchain Technology Explained 13:14 Stable Coins vs. Traditional Banking 15:34 Current State of Stable Coins 16:55 Future of Stable Coins in Retail 17:54 Global Dollar Network 19:35 Yield-Bearing Stable Coins 22:06 Impact on Loan Origination Business 26:55 Separation of Lending and Payments 28:58 Real Estate Lending and Systemic Risk 38:23 Future of Monetary Policy and Stable Coins 47:47:05 Topics for the Second Hour If you enjoyed listening to today’s episode of Hidden Forces, you can help support the show by doing the following: Subscribe on Apple Podcasts | YouTube | Spotify | Stitcher | SoundCloud | CastBox | RSS Feed Write us a review on Apple Podcasts at https://apple.co/3fLSIgR Write us a review on Spotify at https://spoti.fi/3tv4zYr Subscribe to our mailing list at https://hiddenforces.io/newsletter/ Subscribe and Support the Podcast at https://hiddenforces.io Follow Hidden Forces on Twitter:   / hiddenforcespod   Follow Demetri on Twitter:   / kofinas   Producer & Host: Demetri Kofinas Editor & Engineer: Stylianos Nicolaou Follow Demetri on Twitter at @Kofinas Episode Recorded on 09/02/2025