Stablecoins Fall Short as Everyday Money, Says BIS Chief

The Bank for International Settlements (BIS) is renewing its criticism of stablecoins, questioning their credibility as everyday money. BIS General Manager Pablo Hernández de Cos argues that stablecoins do not credibly function as a means of payment at scale.

Hernández de Cos suggests that tokenized bank deposits offer a stronger alternative to stablecoins. He stated, 'Tokenised deposits offer a more direct path to harness tokenisation while preserving the monetary system’s foundations.'

The comments come as regulators worldwide grapple with stablecoin adoption and build regulatory frameworks around them.

Hernández de Cos acknowledged that stablecoins could lower government borrowing costs but noted that this effect could cut both ways for consumers. If customers move bank deposits into stablecoins, banks could face higher funding costs and pass those expenses on to households and businesses through higher borrowing rates.