Stablecoins Fall Short on Monetary Attributes: Depegging and Redemption Friction
The Bank for International Settlements (BIS) has delivered a clear verdict in its 2026 Annual Economic Report: current stablecoins fail to meet the standards for money across four core dimensions—uniformity, resilience, interoperability, and finality. According to the report, stablecoins structurally resemble exchange-traded fund (ETF) shares rather than genuine payment instruments. In secondary markets, stablecoins frequently experience depegging events, where their market price diverges from the peg, and users encounter significant friction when attempting to redeem them. For example, during periods of market stress, major stablecoins like USDT and USDC have temporarily traded below $1, undermining their function as a unit of account.
Macroeconomic Impact: Even at Scale, Net Effect Remains Negative
The global stablecoin market currently has a total capitalization of approximately $320 billion, with over 99% of tokens pegged to the U.S. dollar. The market is dominated by Tether (USDT) and Circle's USD Coin (USDC). The BIS's economic modeling indicates that even if the stablecoin market expands to between $1 trillion and $3 trillion, the net impact on economic output would remain slightly negative. This adverse effect is primarily driven by rising bank funding costs: stablecoins siphon deposits away from commercial banks, forcing banks to raise interest rates to attract funds, thereby compressing credit supply and dampening real economic activity. The report specifically warns of a 'stablecoin dollarization' risk in emerging markets, where residents may increasingly hold dollar-pegged stablecoins as a store of value, altering capital flows and gradually eroding domestic monetary sovereignty.
BIS's Preferred Path: A Unified Ledger to Integrate the Monetary System
Facing the challenges posed by stablecoins, the BIS reiterates its recommended solution: a 'unified ledger' that integrates tokenized central bank reserves, commercial bank money, and regulated private money, all anchored by central bank currency. This approach aims to preserve the uniformity, resilience, and interoperability of the monetary system while avoiding systemic risks that private stablecoins might introduce. The BIS emphasizes that central banks and regulators worldwide should accelerate the exploration of frameworks that combine tokenized central bank money with regulated stablecoins, in order to prevent a de facto currency substitution in emerging markets.