The nightmare scenario for global monetary authorities is not that they will eventually be replaced by crypto but that one day they will have to bail the market out.

The closest we have come is when Silicon Valley Bank collapsed last year. Circle, the stablecoin operator and SVB’s largest depositor, had parked $3.3bn of its reserves uninsured at the stricken lender. In the panic, Circle’s “safe” stablecoin USDC lost its peg to the dollar and it was only when the Federal Reserve guaranteed SVB’s deposits that the crisis was averted.

As more commercial companies launch stablecoins and US politicians consider legislation that could boost use of these tokens, the time may be approaching when central banks have to lay out their terms of engagement with crypto.