The Bank for International Settlements renews its criticism of stablecoins, at a time when government efforts to establish regulatory frameworks for these digital assets are accelerating. According to comments by the BIS Managing Director, Pablo Hernández de Cos, these currencies do not function reliably as a widely used means of payment, raising questions about their ability to become a daily, institutionally and globally accepted payment instrument.

By the term “not fit for widespread payment,” what is meant is not only the question of price or reach, but also the ability of the system itself to operate smoothly across multiple parties while maintaining stability, compliance, and broad acceptance. From this perspective, de Cos believes that tokenized bank deposits offer a stronger alternative, because they allow for the benefits of tokenization while preserving the traditional foundations of the monetary system.

He said that tokenized deposits represent a “more direct pathway” to benefit from tokenization without harming the structure of the financial system. This comparison reflects a broader debate within the financial sector over whether blockchain-based innovations should be built on top of existing banks or outside them.

At the same time, de Cos said that stablecoins could reduce borrowing costs for governments—an idea that US Treasury Secretary Scott Bessent had also backed. However, this effect may not be wholly positive for consumers, since transferring deposits from banks to stablecoins could increase banks’ funding costs, which may lead them to pass on the increase through higher borrowing prices for households and businesses.

He also pointed to other operational and regulatory challenges, including weak interoperability between stablecoin platforms and difficulty applying anti–money laundering controls consistently. He added that expanding the use of US-dollar-linked stablecoins beyond the United States could also raise concerns about monetary sovereignty and weaken the effectiveness of local monetary policy.

FSI study: Clear differences between major markets

Alongside these remarks, the Financial Stability Institute of the Bank for International Settlements published a study comparing the rules governing stablecoin issuers in five key regions: the United States, the European Union, the United Kingdom, Hong Kong, and Singapore.

The study concluded that there are major differences in the types of entities permitted to issue stablecoins, as well as in other activities these entities may carry out. These differences show that the regulatory environment is still not unified, which could directly affect the speed at which institutional payments based on stablecoins are adopted.

According to the study, the United States and Singapore take a more restrictive approach toward non-bank issuers. In the United States, under the GENIUS Act, activities such as lending, staking, trading for the company’s own account, and safeguarding third-party crypto assets fall outside the set of activities permitted for stablecoin issuers intended for payments.

By contrast, Hong Kong, the United Kingdom, and the European Union take a less restrictive approach, as some of these markets allow additional activities, though usually through a separate license, regulatory approval, or other related permissions.

One notable point observed by the study is that restrictions in the five jurisdictions apply to the issuing entity itself rather than to the broader corporate group. This means that other entities within the group may carry out activities that are not allowed for the issuer.

For institutional payments, this regulatory picture means that the path toward wider stablecoin adoption does not depend only on technology, but also on clarity of rules, the limits on permissible activities, and the extent to which these assets can integrate with the existing financial system without creating new risks.

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