BIS chief: today’s stablecoins “fall short” of what’s needed for a widely accepted payment instrument
Pablo Hernández de Cos, General Manager of the Bank for International Settlements (BIS), warned Monday that existing stablecoins do not yet meet the standards required to function as broadly accepted money — even as they offer clear benefits for payments. Speaking at a Bank of Japan seminar in Tokyo, de Cos laid out why fiat‑pegged cryptocurrencies remain limited in their “moneyness” and what that means for the broader financial system.
Why stablecoins still aren’t “money”
Stablecoins — tokens whose value is tied to fiat currencies — have grown rapidly because they enable low‑cost, 24/7 transactions and can act as both a store of value and a payments medium. But de Cos argued two technical and economic properties determine whether an instrument truly functions as money: singleness and interoperability.
- Singleness: Different forms of money must be perfectly substitutable at par across intermediaries and platforms. Central banks provide that single settlement infrastructure for fiat currencies; decentralized stablecoins do not. “Yet confidence shocks can widen discounts abruptly and, when they do, users may refuse to accept certain stablecoins, as seen on several occasions in the past,” de Cos said — a reminder that trust and stability remain fragile.
- Interoperability: Money must move seamlessly across platforms and networks. Today, stablecoins are issued across many blockchains, and even the same token can behave differently depending on its chain. Those fragmentation issues hinder seamless transfers and limit network effects.
Together, those shortcomings undermine the network effects that make money broadly useful: acceptance breeds more acceptance. “It is therefore conceivable that under current designs stablecoins remain a ‘niche’ instrument,” de Cos said.
Potential and risks
De Cos acknowledged the upside: fiat‑pegged cryptocurrencies could materially improve cross‑border payments, cutting costs and settlement times. But he also cautioned that stablecoins pose risks — they can influence credit supply, financial stability, and both monetary and fiscal policy — areas where central banks and regulators must pay close attention.
A data snapshot
Despite headwinds in the wider digital asset market since Q4 2025, the stablecoin sector has been relatively resilient. DefiLlama data shows stablecoins’ combined market capitalization has edged upward and recently surpassed $320 billion — an all‑time high. Meanwhile, Bitcoin was trading around $75,000 at the time of writing, up more than 6% over the past week.
Context
The BIS, an international institution owned by 63 central banks, has been outspoken on stablecoin regulation and systemic risks. De Cos’s remarks signal continued scrutiny from global monetary authorities as the industry evolves and regulators weigh how to harness benefits while limiting risks.
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