Agustín Carstens, the former General Manager of the Bank for International Settlements (BIS), delivered a speech that marks a sharp departure from his previous stance. He now advocates for stablecoins and fiat currencies to coexist within the financial ecosystem, arguing that stablecoins can boost financial innovation, inclusion, and reduce transaction costs.
From Skeptic to Supporter: Carstens' Reversal
During his address, Carstens stressed the need to create conditions for stablecoins and fiat to interoperate, backed by a clear regulatory framework. He warned that without clear rules and a level playing field, stablecoins could not expand rapidly. Just a few years ago, he was among the fiercest critics. In January 2022, he warned that stablecoin issuers might pursue risky reserve strategies, undermining the asset's reliability as money. As recently as June 2025, in one of his final BIS speeches, he cautioned that stablecoins could pose liquidity risks and fail to meet fundamental criteria for public-interest money.
BIS Current Leadership Stays Cautious
Despite Carstens' softened tone, the BIS under its current General Manager Pablo Hernández de Cos remains measured. In April 2026, Hernández de Cos noted the stablecoin market is still small and structurally flawed to function as true money. The BIS's 2026 Annual Economic Report draft echoed these doubts, stating that today's stablecoin models do not yet meet trust requirements and that widespread adoption could threaten financial stability, bank funding, and monetary sovereignty.
Regulatory Progress in the US and EU
On a more positive note, the BIS supports integrating tokenization into the two-tier banking system, suggesting digital asset representations can enable new programmable finance use cases while preserving trust in money. Carstens agreed that traditional finance can benefit from stablecoins, DLT, and tokenization, but only with robust global regulations to foster trust in issuers. Major economies are already moving. The United States enacted the GENIUS Act in July 2025, the first federal framework for payment stablecoins, mandating 100% reserve in cash and short-term US Treasuries. The European Union's MiCA regulations require authorization, published technical documents, full reserves, and segregation of reserve assets from issuer funds.