At a recent symposium in Jackson Hole, the head of the Bank for International Settlements (BIS), Pablo Hernández de Cos, took a firm stance: stablecoins are not ready to become a mass payment instrument on the scale of the global economy. According to him, "stable coins" face fundamental limitations that make them unsuitable for everyday settlements.
Key problems with stablecoins
De Cos highlighted several systemic barriers hindering the integration of stablecoins into the traditional financial system. These include market fragmentation, a lack of interoperability between different blockchain platforms, difficulties in complying with anti-money laundering (AML) requirements, and risks to the monetary sovereignty of states. In the view of the BIS head, these factors do not allow stablecoins to be considered a reliable foundation for everyday payments, although they may perform certain specialized functions.
Tokenized deposits as an alternative
As an alternative, the BIS proposes tokenized bank deposits. They maintain a direct link to the banking system and, according to the regulator, are much better suited for integrating blockchain technologies into the existing financial infrastructure. However, de Cos acknowledged that this instrument also still has unresolved issues—ranging from interoperability to regulation and governance.
Tightening oversight of issuers
The position of the BIS head coincided with the publication of a new study by the Financial Stability Institute, a division of the organization. Analysts examined stablecoin issuance rules in different jurisdictions and found significant discrepancies in approaches. They propose treating issuance, redemption, and reserve management as a basic set of issuer functions, while additional operations—lending, staking, or custodial services—as factors that significantly alter the risk profile.
Of particular concern is the situation with non-bank issuers. While banks are subject to restrictions within consolidated supervision, large players from other segments may circumvent them through separate legal entities. The BIS insists on extending oversight to the entire corporate group, not just the specific issuer.
Conflict of two approaches
The BIS position is especially telling against the backdrop of the rapid growth of the stablecoin market and support from U.S. authorities, who see them as a tool to strengthen the role of the dollar and an additional source of demand for U.S. government bonds. The BIS itself does not deny the usefulness of the technology but proposes a clear separation between crypto assets for specialized scenarios and the infrastructure for mass payments.
Under this approach, stablecoins may retain their role in the crypto market, cross-border settlements, and DeFi, but their impact on the traditional payment system will be limited. According to the BIS, the foundation of tokenized financial infrastructure should be commercial bank money in the form of tokenized deposits.
Earlier, BIS specialists already noted that current stablecoins do not provide the key properties of money, and their issuers, holding significant portfolios of short-term government bonds, could put pressure on money markets during mass token redemptions.
Expert opinion: The BIS position reflects a growing gap between regulatory vision and market reality. While stablecoins continue to gain popularity, especially in the U.S., the BIS approach looks conservative but pragmatic. However, underestimating the role of stablecoins in global liquidity would be a mistake—their resilience to regulatory pressure has already been proven in practice.