Stablecoins went from a niche experiment to one of crypto’s most useful building blocks – growing from near-zero to over $200 billion in market capitalization between 2020 and 2024. That scale has pushed central banks to speak more seriously about Central Bank Digital Currencies (CBDCs). But here’s the twist: according to Lambis Dionysopoulos and Christos Andreas Makridis in “Central bank digital currency rhetoric and stablecoin market responses” (2025), central banks don’t need to launch a CBDC to influence stablecoin behaviour – their communication alone can shift the market.
Their paper makes a simple, powerful point: in digital finance, policy is often “priced in” before it is built. When central bankers sound confident about CBDCs, stablecoin markets respond immediately – through expectations, positioning, and attention.
Why Rhetoric Matters in the First Place
Stablecoins today are not just “crypto cash.” They sit at the centre of crypto liquidity and settlement – used heavily in crypto-to-crypto trading, DeFi protocols, cross-border settlements, and (to a smaller extent) remittances. That makes them unusually sensitive to signals about future regulation or competition from a public-sector alternative.The authors frame CBDC communication as a form of forward guidance: speeches can trigger anticipatory behaviour even when the product (a widely deployed CBDC) is not yet real. This is especially relevant because most CBDCs remain in research or pilot phases, making direct “before/after CBDC launch” analysis difficult.
Inside the Methodology: Tracking the “Information Channel”
Dionysopoulos and Makridis build their study around central-bank speeches and market outcomes from 2020–2023. They rely on a CBDC-speech dataset where speeches are classified by stance (positive/neutral/negative), and they correct speech dates to reflect when remarks were actually delivered.
A few design choices make the empirical strategy convincing:
- Speech sample: 191 CBDC-related speeches (132 positive, 53 neutral, 6 negative) from key central banks including the Federal Reserve (United States), European Central Bank, People’s Bank of China, Bank of England, Reserve Bank of India, and Bank of Canada
- Event windows: Market responses are tested around multiple “stacked” windows (±5, ±10, ±15, ±20 days), capturing both immediate and slightly delayed effects. (The paper’s main tables report these windows directly.)
- Stablecoin supply as market-growth proxy: Supply data is pulled for Ethereum and Tron, plus USDT and USDC, alongside aggregate supply measures.
- Retail attention index: They create an “Online Stablecoin Search Interest” index using global Google Trends searches for keywords like stablecoin, USDT, USDC, DAI, BUSD, Tether, and even crisis-linked terms like Terra Luna. They standardize and rebase daily combined search volume to 100, stitching Google’s rolling 90-day windows into a continuous series that captures how Fed/ECB/PBoC messaging changes stablecoin visibility; the results show pro-CBDC communication sharply boosts retail attention even as stablecoin supply shrinks.
- Controls for shocks: They control for major crypto disruptions (Terra/Luna and FTX) and broader uncertainty (GEPU).
Importantly, they acknowledge a nuance that many commentaries skip: circulating supply is not “pure demand.” It also reflects issuer decisions, redemption frictions, and platform-specific mechanics.
The Core Results: Supply Falls, Attention Rises
The headline finding is a classic expectations story. When central-bank rhetoric becomes more pro-CBDC, the stablecoin market behaves as if tighter competition or regulation is more likely. Across the full stablecoin market, pro-CBDC rhetoric is associated with declines in total stablecoin supply, with estimated effects in the range of −0.16 to −0.21 across event windows.
But the more revealing split is between the two giants:
- USDT shows consistent, statistically significant supply declines after pro-CBDC speeches (roughly −0.08 to −0.10 across windows in the paper’s estimates).
- USDC does not show the same statistically significant negative response, which the authors suggest may reflect greater perceived alignment or acceptance with institutions.
The blockchain lens reinforces the point: effects appear across Ethereum and Tron, even though each ecosystem has its own liquidity patterns and shock sensitivity.Now for the paradox: while supply softens, retail attention increases. Pro-CBDC speeches significantly raise the Online Stablecoin Search Interest index (the Post×Stance coefficients are strongly positive in the paper’s table).One interpretation is simple: CBDC talk makes stablecoins more salient. People look them up – out of curiosity, concern, or opportunity – even if they don’t immediately transact.
What CBDC Signals Really Mean for Stablecoins
From a broader digital finance perspective, the takeaway isn’t “CBDCs will replace stablecoins.” It’s that stablecoins are now important enough to sit inside the policy conversation – and that markets are sophisticated enough to price policy signals quickly.
The paper also offers a caution policymakers should take seriously: if CBDC-related expectations trigger large redemptions, forced reserve liquidations could spill into sovereign debt markets – precisely because stablecoin issuers hold significant short-term instruments. That is an argument for thoughtful regulation and predictable communication, not abrupt signalling. The authors’ own recommendation is constructive: pursue coexistence and interoperability between public and private digital money, and avoid communication strategies that create unnecessary displacement.
Bottom Line
Dionysopoulos and Makridis show that the future of digital money is being negotiated in speeches long before it is coded into networks. And for crypto, that’s not just a risk – it’s a maturity marker. The smartest path forward is not CBDC vs stablecoins, but a regulated architecture where both can coexist, interoperate, and expand digital finance responsibly.