The Bank for International Settlements (BIS) general manager, Pablo Hernández de Cos, called for tighter global coordination on stablecoins, warning that US dollar–denominated tokens could have “material consequences” for financial stability and economic policy if they grow large enough to rival traditional money.
Speaking at a Bank of Japan seminar in Tokyo, he said current stablecoin arrangements fall short of what would be needed for a widely used means of payment, even if they enable faster cross-border transfers and integration with smart contracts. He argued the largest dollar stablecoins, including USDT and USDC, resemble investment products more than cash-like money: they impose fees and conditions on primary market redemptions and have experienced price deviations from par in secondary markets.
Those features, Hernández de Cos said, make the tokens behave more like exchange-traded funds while still creating run and contagion risks because issuers hold short-term government debt and bank deposits as reserve assets. In a stress episode, rapid outflows from stablecoins could force sales of reserves into already strained markets or transmit funding pressure to banks.
He also warned that activity on public, permissionless blockchains and in unhosted wallets often sits outside conventional Anti-Money Laundering and Counter-Terrorism Financing controls, making stablecoins attractive for illicit use unless bespoke safeguards are implemented at on- and off-ramps.
The remarks come amid global policymaker debate over how to regulate fast-growing stablecoins and other tokenized, money-like instruments. European officials have recently pushed for firmer limits: Bank of France First Deputy Governor Denis Beau urged the EU to go beyond the Markets in Crypto Assets Regulation by restricting non-euro-denominated stablecoins in everyday payments and tightening rules to curb regulatory arbitrage when stress hits.
The European Central Bank has contrasted euro-denominated stablecoins with tokenized money market funds, noting both perform liquidity transformation and face run risk but do so under different transparency, liquidity management and regulatory regimes that affect how stress spills into funding markets.
Other jurisdictions are recalibrating policy. In the U.K., members of the House of Lords questioned Coinbase about whether stablecoins could drain bank deposits, trigger Silicon Valley Bank–style runs and facilitate crime as the government finalizes a bespoke fiat-backed token regime. In Switzerland, UBS and several banks launched a franc-denominated stablecoin pilot in a sandbox to explore blockchain payments while keeping the instruments anchored in the regulated financial system.
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