Four Deficiencies of Stablecoins
The Bank for International Settlements (BIS), in its 2026 Annual Economic Report, conducted a systematic evaluation of stablecoins, concluding that they fail to meet monetary standards across four critical dimensions. First, singleness: stablecoins lack the value uniformity of fiat currencies, as prices of stablecoins from different issuers may diverge. Second, resilience is insufficient; under market stress, stablecoins may de-peg or experience liquidity crises. Third, interoperability is limited; stablecoins on different blockchains cannot be seamlessly transferred. Fourth, integrity is questionable, including concerns about reserve transparency, audit standards, and anti-money laundering compliance. The BIS points out that the operational model of stablecoins is more akin to exchange-traded funds (ETFs) than to genuine payment instruments, as their value depends on underlying asset portfolios rather than sovereign credit.
Economic Impact and Risks
The report further quantifies the potential macroeconomic effects of stablecoin expansion. Even if the total market capitalization of stablecoins grows to between $1 trillion and $3 trillion, the net effect on economic output remains negative. This is because the issuance and redemption processes drain deposits from the banking system, forcing banks to raise funding costs and curtail credit supply, thereby suppressing real economy investment. Moreover, the BIS specifically warns of a 'stablecoin dollarization' risk in emerging economies: when residents hold large amounts of dollar-pegged stablecoins, demand for local currencies declines, exchange rate stability is impaired, and monetary sovereignty may be gradually eroded. This phenomenon has already emerged in some South American and African countries, and the BIS believes it will exacerbate financial vulnerabilities in emerging markets.
BIS Alternative: Unified Ledger and Project Agora
As a countermeasure, the BIS recommends anchoring monetary systems to central bank money by building a unified ledger that integrates tokenized central bank reserves and commercial bank money. This model fuses central bank digital currencies (CBDCs) and tokenized commercial bank deposits on a single programmable platform, enabling instant, secure cross-border payments while preserving the credit intermediary function of banks. The BIS cites its ongoing Project Agora cross-border payment prototype as evidence of feasibility. Project Agora aims to achieve atomic settlement using tokenized deposits and central bank reserves, avoiding the systemic risks posed by stablecoins. The report emphasizes that only a public-sector-anchored monetary infrastructure can safeguard financial stability and monetary sovereignty.