BIS Chief Says Stablecoins Lack Credibility for Large-Scale Payments

The Bank for International Settlements is renewing its criticism of stablecoins, with General Manager Pablo Hernández de Cos arguing the tokens do not credibly function as a means of payment at scale. Speaking ahead of a potential bid to succeed European Central Bank President Christine Lagarde in 2026, de Cos told Reuters that tokenized bank deposits offer a stronger path forward. "Tokenised deposits offer a more direct path to harness tokenisation while preserving the monetary system's foundations," he said. He also cited limited interoperability between stablecoin platforms, inconsistent anti-money laundering enforcement, and the risk that US dollar-pegged stablecoins circulating abroad could erode monetary sovereignty.

De Cos acknowledged one benefit stablecoin advocates frequently cite: lower government borrowing costs, an argument also advanced by US Treasury Secretary Scott Bessent. However, he warned of a knock-on effect for consumers. If depositors shift funds from banks into stablecoins, lenders could face higher funding costs and pass those on through increased borrowing rates for households and businesses. His remarks come as regulators across the US, European Union, United Kingdom, Hong Kong, and Singapore race to finalize frameworks for stablecoin issuers amid growing adoption.

A new study from the BIS-linked Financial Stability Institute, published Thursday, highlights just how fragmented those efforts remain. Researchers found substantial differences in which entities may issue stablecoins and what additional business activities they can conduct. The US and Singapore take comparatively restrictive approaches: under the US GENIUS Act, payment stablecoin issuers are generally barred from lending, staking, proprietary trading, and custody of third-party crypto assets. Hong Kong, the UK, and EU jurisdictions take a more flexible stance, permitting some additional activities with separate authorization or regulatory consent.

The findings underscore a core tension in global crypto oversight: jurisdictions are converging on the need to regulate stablecoins but diverging sharply on the rules themselves. For policymakers weighing whether stablecoins can serve as everyday money, de Cos made his position clear: tokenized deposits backed by central-bank-friendly infrastructure remain the safer bet.