BIS General Manager Says Stablecoins Lack Credibility for Large-Scale Payments

Bank for International Settlements (BIS) General Manager Pablo Hernández de Cos said stablecoins lack credibility in large-scale payment scenarios and are difficult to use as everyday currency. He argued that tokenized bank deposits are a superior alternative, delivering the benefits of tokenization while preserving the foundations of the monetary system. His remarks come as regulators worldwide are building regulatory frameworks around stablecoins. Hernández de Cos also acknowledged that stablecoins could lower government borrowing costs, but could also push up bank funding costs, which would then transmit to loan rates for households and businesses. He further noted that interoperability between stablecoin platforms is limited, anti-money laundering controls are inconsistently enforced, and the widespread overseas use of dollar-pegged stablecoins could weaken other countries' monetary sovereignty and the effectiveness of their domestic monetary policy. In a research report released the same day, the BIS's Financial Stability Institute (FSI) compared stablecoin regulatory rules in the United States, the European Union, the United Kingdom, Hong Kong, and Singapore, finding significant differences across jurisdictions in issuer eligibility and the scope of permissible business activities. The US and Singapore impose stricter restrictions on non-bank issuers, while Hong Kong, the UK, and the EU allow certain additional activities under separate authorization or licensing.