Bank for International Settlements General Manager Pablo Hernández de Cos said stablecoins lack the credibility needed for large-scale payments and are unlikely to function well as everyday money. He argued that tokenized bank deposits offer a better alternative because they can preserve the foundations of the monetary system while still capturing the benefits of tokenization. His comments came as regulators in multiple jurisdictions continue building frameworks for stablecoin oversight.
Hernández de Cos also said stablecoins could lower government borrowing costs, while at the same time raising bank funding costs and passing that pressure on to household and corporate loan rates. He pointed to limited interoperability across stablecoin platforms and uneven anti-money laundering enforcement as additional concerns. He also warned that broad overseas use of dollar-pegged stablecoins could weaken other countries’ monetary sovereignty and reduce the effectiveness of domestic monetary policy. On the same day, the BIS’s Financial Stability Institute published a report comparing stablecoin rules in the U.S., EU, UK, Hong Kong, and Singapore, finding significant differences in issuer eligibility and permitted business activities.
Pablo Hernández de Cos, general manager of the Bank for International Settlements (BIS), said stablecoins lack credibility in large-scale payment settings and are difficult to use as everyday money. He said tokenized bank deposits are a better substitute because they can retain the foundations of the monetary system while delivering the advantages of tokenization.
Concerns over payments, funding costs and monetary control
The remarks came as regulators across jurisdictions work on stablecoin regulatory frameworks. Hernández de Cos also said stablecoins could reduce government borrowing costs, but they could also raise bank funding costs, with that pressure then passing through to loan rates for households and businesses.
He added that interoperability across stablecoin platforms remains limited and that anti-money laundering controls are enforced unevenly. He also said the broad overseas use of dollar-pegged stablecoins could weaken other countries’ monetary sovereignty and the effectiveness of their domestic monetary policy.
FSI report compares rules across five jurisdictions
The BIS’s Financial Stability Institute (FSI) published a research report the same day comparing stablecoin regulatory rules in the United States, the European Union, the United Kingdom, Hong Kong, and Singapore. The report found significant differences across jurisdictions in issuer eligibility and the range of business activities allowed.
According to the report, the United States and Singapore impose tighter restrictions on non-bank issuers, while Hong Kong, the United Kingdom, and the European Union allow some additional activities under separate authorization or licensing arrangements.
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