The Bank for International Settlements (BIS) has released a pivotal chapter from its Annual Economic Report 2026, issuing a call to integrate digital innovation into the established two-tier monetary system while preserving public confidence in money. The report, published on 23 June 2026, focuses on the dual promise and peril of tokenisation, with a critical examination of stablecoins.
The BIS analysis concedes that tokenisation—the digital representation of assets on programmable platforms—could accelerate payments, increase competition, and boost efficiency. Yet, the report contends that current stablecoin designs fall short of the fundamental attributes that sustain trust in money. Most notably, they lack “singleness”, the guarantee that different forms of money are exchangeable at exact par value against central bank liabilities. Operating on public, permissionless blockchains also raises concerns around financial crime resilience, reliable redemption, and interoperability between ledgers.
The chapter warns that if stablecoins achieve broad adoption, they could significantly alter how banks source funding and extend credit, creating financial stability pressures. Much of the impact would hinge on reserve composition, use cases, regulatory frameworks, and the response of the wider financial system. A further risk arises because most stablecoins are denominated in US dollars—large-scale global demand could amplify capital-flow volatility and threaten monetary sovereignty in economies with weaker fundamentals.
To address these challenges, the BIS urges coordinated policy action on two fronts. In the near term, authorities must remedy the shortcomings of existing stablecoin arrangements, tailoring regulation to whether they are used chiefly for large-value payments or investment. The longer-term vision is a “unified ledger” that brings tokenised commercial bank deposits and tokenised central bank reserves together on a single platform, anchored by central banks. An early prototype, Project Agorá, involves eight central banks and over 40 regulated financial institutions exploring improvements to wholesale cross-border payments via such a shared infrastructure.
The BIS concludes that the greatest benefits of financial innovation arise when it is embedded within institutions, clear legal rules, and effective oversight, steering the evolution of money in the public interest.
