The Bank for International Settlements has issued a strong warning that privately issued fiat-pegged stablecoins currently lack the institutional standards needed for large-scale payments.
Speaking at the Federal Reserve’s Jackson Hole symposium on 28 August 2026, BIS General Manager Pablo Hernández de Cos argued that stablecoins fail key tests of money as an institutional arrangement: singleness, elasticity of liquidity, interoperability and financial integrity. Different issuers’ coins are not automatically interchangeable at par, networks remain fragmented across blockchains and scaling layers, and many transfers occur outside consistent know-your-customer and anti-money-laundering controls.
He also highlighted macro-financial risks: a shift of household and firm deposits into stablecoins could raise bank funding costs and tighten lending, while fire sales of stablecoin reserves could transmit stress to core markets. Tokenised bank deposits, by contrast, remain bank liabilities settled in central-bank money, preserving singleness and keeping credit intermediation inside the supervised system.
Meanwhile, U.S. banks are increasingly seeking a regulatory framework to implement tokenised deposit networks with clear safety, privacy and compliance standards. Financial institutions see such clarity as crucial for adapting traditional banking to digital assets, potentially reshaping how tokenized value moves within the banking system.
