BIS Chief Skeptical of Stablecoins as Scalable Payment Method

De Cos assessed stablecoins against three pillars of a functioning monetary system: singleness, interoperability, and financial integrity. He noted that stablecoins often struggle to maintain parity with the dollar in secondary markets, unlike regulated bank deposits that settle through central bank accounts. Furthermore, the fragmented nature of blockchain networks and the reliance on bridges create operational and custody risks that hinder seamless movement of funds.

While stablecoins could theoretically lower U.S. government borrowing costs by increasing demand for Treasury bills, the BIS warned of potential systemic downsides. If households shift capital from bank deposits into stablecoins, commercial lenders may face higher funding costs, potentially tightening credit for small businesses and consumers. Despite these concerns, de Cos did not advocate for a total ban. He envisions a future where stablecoins and tokenized deposits coexist, with the latter handling daily wholesale payments while stablecoins serve niche roles like decentralized lending under strict regulatory oversight.