BIS Chief Slams Stablecoins: 'Do Not Yet Uphold Foundational Properties of Money'

The Bank for International Settlements (BIS) chief, Agustín Carstens, has delivered a blunt verdict on stablecoins. Speaking at the Federal Reserve Bank of Kansas City's annual retreat, he stated that these digital assets 'do not yet uphold the foundational properties of money.'

According to Carstens, stablecoins lack four key properties: par redeemability, elasticity, interoperability, and financial integrity. He pointed out that issuers cannot guarantee a one-to-one cash-out like traditional bank deposits, supply does not expand or contract with real economic activity, tokens move poorly across competing blockchains, and self-custodied wallets make anti-money-laundering enforcement harder.

Carstens suggested that tokenized deposits are a more direct path to harness tokenization while preserving the monetary system's foundations. He highlighted that regulators will weigh the benefits of faster settlement and lower fees against strict monetary-integrity standards before endorsing wider use of stablecoins.

The stakes are high, with global stablecoin supply reaching $308 billion, up over 14% year-over-year, despite pulling back from a May peak. Tether's USDT alone accounts for roughly 60% of this total.