BIS General Manager Warns Stablecoins Risk Becoming 'Unregulated' at Scale
The Bank for International Settlements' General Manager, Pablo Hernández de Cos, raised concerns about the feasibility of stablecoins at scale during a recent speech at the Jackson Hole Economic Symposium.
Cos cited issues with redeemability, interoperability, and financial integrity as major concerns, in addition to the fact that stablecoins are heavily skewed towards the US dollar, raising questions about payments sovereignty.
However, Cos also highlighted the advantages of tokenized deposits, which he believes deliver the benefits of blockchain within the established financial services paradigm.
Cos noted that while stablecoins and tokenized deposits may appear similar on the surface, they represent different models of money. Tokenized deposits keep funding and customer relationships within the banking system, whereas stablecoins offer greater interoperability outside it.