BIS chief: Stablecoins lack credibility for large-scale payments

Bank for International Settlements General Manager Pablo Hernández de Cos has renewed criticism of stablecoins, stating they lack credibility for large-scale payments. He suggested that tokenized bank deposits offer a more robust alternative for daily transactions while preserving the foundations of the monetary system. De Cos acknowledged that stablecoins could potentially lower government borrowing costs, but warned that a shift of deposits into stablecoins could increase banks' funding costs, leading to higher borrowing rates for consumers and businesses. He also highlighted issues such as the disruption of the 'singleness' of money, difficulties in applying anti-money laundering controls consistently, and the potential erosion of monetary sovereignty in non-U.S. jurisdictions if dollar-pegged stablecoins gain traction. These comments come as regulators globally develop frameworks for stablecoins, and a new study from the BIS-linked Financial Stability Institute (FSI) reveals significant differences in how major markets regulate stablecoin issuers. The FSI study found that the US and Singapore are more restrictive towards non-bank issuers compared to Hong Kong, the UK, and the EU, which allow more business activities with separate authorization. U.S. Treasury Secretary Scott Bessent has previously supported stablecoins, viewing them as a digital revolution that could enhance the dollar's global status.