Banks Defy BIS Warning, Press Ahead with Stablecoin Plans

The Bank for International Settlements (BIS) has questioned the role of stablecoins in the financial system, but despite this, major banks are moving forward with plans to issue their own stablecoins on public blockchains.

Pablo Hernández de Cos, general manager of the BIS, said at the Jackson Hole Economic Symposium that a framework based on tokenized deposits looks more promising than stablecoins. He argued that stablecoins lack three key properties: singleness, interoperability, and financial integrity.

Singleness refers to the ability to transfer value between different stablecoin holders without having to convert them first. Interoperability is the ability for different blockchains to communicate with each other seamlessly. Financial integrity is the protection of transactions from fraud and illicit activities.

The BIS has expressed concerns about the risks associated with stablecoins, including their potential to destabilize financial markets and threaten monetary sovereignty in emerging economies.