The singleness of money: Why every dollar must be worth a dollar
- The problem with selling when you want to redeem
- It gets worse at the edges
- The clearinghouse model
- Why blockchains don't solve this alone
- The path forward
Money is most useful when everyone agrees on the value of every dollar in a monetary system. We call this the singleness of money. It's an important term, in part because the history of money is the history of attempting to get to this level of singleness.
In the 1870s, you really could not expect that $2 would be worth exactly the same even in a medium-sized transaction. That's because of slippage and various points of convenience of using different dollar issuers — different banks. If you held a note from a bank in Philadelphia and tried to spend it in New York, you might lose a few cents on the dollar. The merchant didn't trust your bank. The note was worth less than face value. It took decades of regulation, clearinghouses, and eventually a central bank to solve this.
We solved it so thoroughly that most people alive today have never questioned whether their dollar is worth a dollar. Your Chase dollars equal your Wells Fargo dollars equal your Venmo balance. Always exactly one-to-one. This holds true despite underlying differences in how those institutions manage their assets and important but often overlooked differences in regulatory status.
And then stablecoins broke it.
The problem with selling when you want to redeem
When you go to Wells Fargo or Bank of America or HSBC, you don't go and ask for your money and hope that they do a market operation. You have a strong expectation, backed by some level of regulation, that you're going to get the full dollar amount. We call that a redemption. It's the same thing that you do with a check. You get your full money out of a check.
But when you use an AMM right now to go from USDC to USDT, you are selling it at a market price as defined by an AMM. Even a deep and liquid one, like a Curve pool, is ultimately a market operation. If you try to move some astronomical number — a billion dollars — you would move that market. And so we rely on market makers and OTC desks and other things in order to deepen the liquidity. But fundamentally, you're doing a market operation.
This is the key verb to think about: a sell operation versus a redemption.
I experienced this firsthand. I took angel investment from a couple of fintechs — they sent me stablecoins to my Coinbase business account. When I moved those stablecoins to my bank account to pay a credit card bill, I got a notification: "You just sold $10,000 worth of stablecoins." That's the tell. The fact that Coinbase called it a sale — not a transfer, not a withdrawal — is indicative of the fact that every stablecoin transaction today is a spot transaction instead of being a transfer. You don't "sell" your Wells Fargo balance to move it to Bank of America.
The distinction matters enormously at scale. There were five weeks recently where Tether was worth $0.9987. If you tried to sell Tether, that's a huge amount of slippage on $1. For retail, maybe you don't notice. For a business moving $5 million, losing $6,500 because your dollar isn't worth a dollar is unacceptable. For a business moving $50 million, it's catastrophic.
It gets worse at the edges
The slippage problem isn't uniform. If you try to go USDC to USDT on a major chain, you're probably okay — you're getting within 10 basis points of the dollar. But that's still a lot of slippage, especially on large dollar amounts.
If you wanted to go PYUSD to USDC on, say, OP's mainnet, you're definitely going to have huge slippage. You might lose 13%. You might try to send a million dollars and end up with $870,000. A clearly unacceptable state of affairs.
If you want to make interesting choices with your technology stack, you're going to need some better offering for this kind of money movement.
And the problem scales with adoption. Circle actually caps how much USDC you can burn — redeem — in a given period. As Edward Woodford from Zero Hash put it: "As you become more successful, you should hit the Circle caps." The more volume you do, the more you run into redemption limits. The very success of the system exposes the inadequacy of its redemption infrastructure.
This is what the fragmentation of stablecoins produces. Each stablecoin is its own island of liquidity. Moving between them costs you something — sometimes a little, sometimes 13%. And unlike a bank, there's no regulatory requirement that you get your full dollar back.
The clearinghouse model
The initial clearinghouses — the ones that fixed this exact problem for banks in the 19th century — turned a graph that was randomly configured, where every bank touched every other bank, into a hub and spoke. The clearinghouse at the center took in transactions, cleared them against each other, did some netting, and then settled on behalf of counterparties.
A stablecoin clearinghouse does the same thing. Instead of selling stablecoins at market prices through AMMs, you redeem them through a clearinghouse that guarantees par conversion. The clearinghouse works directly with issuers, nets payment orders against each other so that only minimal fiat movement is required, and emits money with no slippage — at par redemption.
There's also a structural asymmetry that makes this urgent: no one wants to be a net redeemer. People hit real liquidity and cost constraints when off-ramping stablecoins, because the issuers don't want large net outflows. A clearinghouse solves this through netting — if roughly equal amounts are flowing between stablecoins, the actual fiat movement is minimal, and no single participant bears the cost of being a large net redeemer.
This is the difference between a market and a monetary system. In a market, the price floats. In a monetary system, a dollar is a dollar.
Why blockchains don't solve this alone
We can see everything with a blockchain, but we don't yet have this preferential redemption treatment. In part because with money, you actually rely on an off-chain leg — where's the cash coming from? And you don't want that to be a typical market-price cash conversion. You want it to be a redemption-based cash conversion.
The Genius Act actually requires this, but most stablecoin issuers have not implemented it yet. And until they do, the singleness of money — the property that makes a monetary system actually function — remains broken for stablecoins.
The path forward
Stablecoins are better, faster, and cheaper than the alternatives. They've got a great UX because they're pegged to a dollar, and most people across the world are familiar with the dollar. But being pegged to a dollar and being redeemable for a dollar are two very different things.
The history of money tells us that singleness isn't a given. It's infrastructure that has to be built. Banks spent over a century building the clearinghouses, insurance funds, and regulatory frameworks to make every dollar worth exactly a dollar. Stablecoins need their own version of that infrastructure. And they need it before the next wave of institutional adoption runs headfirst into the slippage problem.
Because right now, a stablecoin dollar is not always worth a dollar. As Ken from Affinity put it: "It is just not functioning like money until it's that way. No matter how fast and how frictionless and how small you can wrench the fee down." He's right. A stablecoin dollar must be worth a dollar — always, for everyone, at any amount — or we haven't finished the work that started in the 1870s.
Quotes
Source: Sam Broner / Common Prefix — Jan 20, 2026
Defining singleness of money
Money is most useful when everyone agrees on the value of every dollar in a monetary system. So we call this generally the singleness of money. It's an important term, in part because the history of money is attempting to get to this level of singleness.
The 1870s
In the 1870s — I know US banking history better than I know European or otherwise — you really could not expect that $2 would be worth exactly the same even in a medium-sized transaction. That's because of slippage and various points of convenience of using different dollar issuers than banks.
Redemption vs. selling
The key verb to think about is a sell operation versus a redemption. When you use an AMM right now to go from USDC to USDT, you are selling it at a market price as defined by an AMM. Even a deep and liquid one, like a Curve pool, is ultimately a market operation. And we all know if you try to move some astronomical number, a billion dollars, you would move that market. And so we rely on market makers and we do OTC desks and other things in order to deepen the liquidity. But fundamentally, you're doing a market operation.
When you go to Wells Fargo or Bank of America or HSBC or choose your bank, you don't go and ask for your money and hope that they do a market operation. You have a strong expectation, backed by some level of regulation, that you're going to get the full dollar amount. We call that a redemption. It's the same thing that you do with a check. You get your full money out of a check, and it's something that's really been prioritized by the Fed.
Tether slippage
There's five weeks recently where Tether was worth $0.9987. If you tried to sell Tether, that's a huge amount of slippage on $1, if that's what you're looking for.
PYUSD slippage
If you wanted to go PYUSD to USDC on, let's say OP's main chain, you're definitely going to have huge slippage. We've been doing motions like this — trying to price this, you might lose 13%. You might try to send a million dollars and end up with $870,000. Just a clearly unacceptable state of affairs. If you want to make interesting choices with your technology stack, you're going to need some better offering for this kind of money movement.
What a clearinghouse is
A clearinghouse generally — imagine you've got a graph of nodes and you want each of them to be interconnected. Very expensive N-squared operation for nodes. So the initial clearinghouses turned a graph that was randomly configured such that everyone touched everyone into a graph that looked more like a wheel with a hub and a spoke. And so what you would do is you would say, look, the cost of setting up N-squared transactions is too high. We're all going to connect with the spoke and we're going to switch transactions into being a two-leg transaction.
The clearinghouse in practice
We'll fund a payment order from all of these assets, and we'll send it, we'll forward it to a recipient. We do a netting period where we get a bunch of these payment orders in, we net payment orders against each other. So that way we only have to do as little money movement as possible in the fiat side. We then create what's called a net settlement statement. We send the net settlement statement to a bunch of issuers and we move money around the fiat leg, and then ultimately, we emit the money with no slippage. So at par — at par redemption to the sender.
Blockchains don't solve this alone
We can see everything with a blockchain, but we don't yet have this preferential redemption treatment, in part because with money, you actually rely on an off-chain leg — where's the cash coming from? And you don't want that to be a typical cash conversion. You don't want it to be a market-price cash conversion. You want it to be a redemption-based cash conversion. And the Genius bill actually requires this, but most stablecoin issuers have not implemented it yet.
Stablecoins as bearer assets
A stablecoin is ultimately an on-chain bearer asset. Bearer meaning if you hold it, you own it. As opposed to a registered asset where if your name's on it, she owns it, even if someone else has the piece of paper in his hand. And you can redeem that stablecoin at par for a dollar in some other form.
Why stablecoins are useful
Clearly stablecoins are better, faster, cheaper, which are three really useful things. And they've got a great UX because they're pegged to a dollar, and most people across the world are familiar with the dollar.
One is the fact that you can do atomic transactions. I can just send someone money remotely. How would I even attempt to do that right now? I would necessarily have to have kind of maybe a dozen counterparties. I mean, maybe I can go through Wise, but Wise has many counterparties. And so you get this new ability to make a more complicated transaction, in part because you're not constrained by the limitations of banks.
Stablecoins upgrade bank ledgers
A good part of stablecoin success is actually that banks' ledgers — their core systems, that track where dollars and cents are — were built in the 1970s and 80s, and they're so behind on upgrading these ledgers they can't even do simple things like send money from one user internally to another in less than like two or three hours.
"It is just not functioning like money until it's that way"
Source: Zoom: Better Money Co. / Affinity — Dec 12, 2025
Ken (Affinity): The most compelling thing is you're so right about the transfer of money should not be a sale and a buy, it should be an exchange. It is just not functioning like money until it's that way. No matter how fast and how frictionless and how small you can wrench the fee down. It's just not going to be thought of as money until that can happen.
"You just sold $10,000 worth of stablecoins"
Source: Zoom: Better Money Co. / Affinity — Dec 12, 2025
Sam: I took angel investment from a couple of fintechs because I wanted to know the leaders of those companies and make sure that we were bonded through equity. They sent me stablecoins to my Coinbase business account. I had to move those stablecoins into my bank account to pay a credit card bill. And when I sent the 10,000 USDC to my bank account, I get this notification saying you just sold $10,000 worth of stablecoins. And that action right there, the fact that I sold it, is indicative of the fact that every stablecoin transaction is a spot transaction instead of being a transfer.
A banker sees the same problem
Source: Better Money / Customers — Jan 14, 2026
Sam: It's not like sending Wells Fargo to Bank of America. You got to sell Wells Fargo to buy Bank of America, and it's crazy.
Rob (Customers Bank): It's been my critique of them for a long time.
Littio paying 1% to swap stablecoins
Source: Sam Broner and Christian Knudsen, Co-founder & CEO Littio — Jan 14, 2026
Christian (Littio): I think you'd be pretty good, because I remember we had that pain — that was maybe one, one and a half years ago. And we had to swap between USDC and USDT because we use USDC as umbrella. But we got a lot of USDT and DAI and we were being charged like 1%. And as soon as we analyzed the P&L and we started, like, where the money was going out in the operational side — we understand.
Fintechs want a dollar sign, not USDXYZ
Source: Better Money / Modern Treasury — Jan 9, 2026
Sam: A typical fintech partner of ours is saying something like, we want to offer stablecoins, but we want it to have a dollar sign and not like USD XYZ 1112. That's just crazy. They want to be able to offer a button that says "move money" and then know what the pricing is going to be before the button is pressed.
Circle caps burning — and it gets worse at scale
Source: Sam Broner / Edward — Jan 9, 2026
Edward (Zero Hash): Circle actually caps burning. And we're right at the tip of what we can do. So the problem for you — as you become more successful, you should hit the Circle caps. And to me, it's nuts. It shouldn't be legal.
Sam: It should not be legal. I completely agree.