Tokenized Deposits vs Stablecoins: BIS Takes Sides in Payment Model Debate
The future of payments is being shaped by two competing models: stablecoins and tokenized deposits. Stablecoins, such as USDT and USDC, have already demonstrated their ability to move dollar-denominated value globally through blockchain networks.
Banks are developing another model, called tokenized deposits, which represent existing deposit balances on programmable infrastructure. The Bank for International Settlements (BIS) has taken a clear position in this debate, arguing that tokenized deposits offer a more promising foundation for mainstream payments.
The BIS General Manager, Pablo Hernández de Cos, argued at the Jackson Hole Economic Symposium on August 28 that tokenized deposits preserve three properties of trustworthy money: singleness, interoperability, and financial integrity. He believes that stablecoins may be better suited to more specialized roles.