The quality of stablecoins should be measured in comparison to cash, but first a quick overview about standard properties of money with focus on stablecoins.
Unit Of Account
The stablecoin paradox is the fact, that the static quality of a stablecoin is identical down to the last cent to all the other stablecoins. A 1 USD stablecoin is 1 USD by definition. The value is the same for all of them. In moneyness terms, the static quality represents the unit of account property. The first quality, the static quality, can be compared to a liquid without movement. It has the potential to flow, but is static for now.
Medium Of Exchange
The second quality, the spot quality of a stablecoin, can be very different. In moneyness terms the spot quality represents the medium of exchange properties. If you compare this to physics, it is a liquid which has some mass and some velocity, it becomes liquidity. A fixed amount of stablecoins can flow slow or fast or different quantities can flow the same speed. At this point the exchange liquidity available for this stablecoin counts. If you exchange 1 stablecoin valued 1 USD, all stablecoins can be exchanged to each other. Try that with 1 million USD worth of one stablecoin, and you may end with way less than 1 million USD in value.
Store Of Value
In the duration quality of a stablecoin, we find the widest range in quality. In moneyness terms the duration quality represents the store of value properties of a stablecoin. While the other two properties can be measured, the store of value is inherently unquantifiable, it describes a quality that may exists at a future date, and the further that date, the more uncertain it becomes. This is why this quality is built on the medium of exchange properties and on the reputation of the issuer. If you compare this to physics, you can see the store of value as acceleration, or in the case of a shock, a sudden deceleration upon impact. Before stablecoins existed, this quality has been under the radar and mentally bound to nation state currencies. The less a currency loses in value over time, the lower the inflation, the better the store of value. As most nation states today exist longer than a human lifespan, we take for granted that the issuer of nation state currency will not cease to exist. As every stablecoin is issued by someone, but not by a nation state, the store of value properties is bound to the issuer risk.
Cashness
But, and here comes the fifth quality, I call it cashness.
What is cashness?
Cashness is the measure of how similar a stablecoin or nation state currency is to cash, physical bills and coins of a nation state currency. What what many do not realize, most daily money today is commercial bank money, it is a number on a bank account, the issuer is the bank, not the nation state. It is not cash. It is private money of the bank you have the account with. If the bank disappears, your money disappears too. Because we are used to sending money to someone else with a different bank account at a different bank and the amount of money stays the same, we assume that we own nation state money, but we do not.
In the Swiss constitution, only bills and coins are defined as legal tender. Only cash is money backed by the nation state, the rest is all private commercial bank money. So cash has per definition the best cashness, while other forms of money are close, but not equal. Cash is: censorship resistant, not traceable, easy to store, cannot be changed by the issuer once you own it.
Now we can take that concept and apply it to stablecoins! What is the cashness of different stablecoins?
Cashness varies widely across stablecoins, and mostly scores low. Most are not censorship resistant, most are fully traceable on-chain, none are easy to store long term, and none are very lindy yet.
If you made it until here, yes, cashness is the fifth quality, he fourth property of stablecoins is means of speculation! You find more here: https://www.cryptonative.ch/introducing-means-of-speculation-as-a-core-characteristic-of-early-stage-stablecoins/