BIS Highlights Risks of Stablecoins as Payment Tools, Favors Tokenized Bank Deposits

According to ME News, on August 29 (UTC+8), Pablo Hernández de Cos, General Manager of the Bank for International Settlements (BIS), stated that stablecoins currently lack credibility as a means of large-scale payments, whereas tokenized bank deposits are more likely to preserve the foundations of the existing monetary system while leveraging blockchain technology. Hernández de Cos noted that while stablecoins may reduce government financing costs, a large-scale shift of bank deposits into stablecoins could increase banks’ funding costs, ultimately passing higher lending rates on to households and businesses. Additionally, limited interoperability among stablecoins, difficulties in uniformly enforcing anti-money laundering rules, and the expanding use of USD-stablecoins outside the United States could pose risks to financial stability and monetary sovereignty. A recent study by the BIS’s Financial Stability Institute (FSI) also revealed significant regulatory differences among the United States, the European Union, the United Kingdom, Hong Kong, and Singapore regarding stablecoin issuers. The United States and Singapore impose relatively strict restrictions on non-bank issuers; for instance, the U.S. GENIUS Act generally prohibits payment stablecoin issuers from engaging in lending, staking, proprietary trading, or third-party crypto asset custody. In contrast, Hong Kong, the United Kingdom, and the EU permit certain related activities under additional authorization or regulatory licensing. (Source: BlockBeats)