{"id":102967,"date":"2025-06-25T08:41:57","date_gmt":"2025-06-25T12:41:57","guid":{"rendered":"https:\/\/coinscreed.com\/staging\/?p=102967"},"modified":"2025-06-25T08:42:02","modified_gmt":"2025-06-25T12:42:02","slug":"bis-criticizes-stablecoins","status":"publish","type":"post","link":"https:\/\/coinscreed.com\/staging\/bis-criticizes-stablecoins\/","title":{"rendered":"BIS Criticizes Stablecoins, Urges Tight Restrictions on Their Use as Money"},"content":{"rendered":"\n

The Bank for International Settlements (BIS) has issued a strong warning about stablecoins, asserting that they are not suitable substitutes for traditional forms of money. In a newly released report, the central banking institution argued that stablecoins<\/a>, despite being pegged to national currencies, fail to deliver the fundamental qualities of sound money and should face strict limitations in their use within the financial system.<\/p>\n\n\n\n

\"BIS
BIS Criticizes Stablecoins, Urges Tight Restrictions on Their Use as Money<\/figcaption><\/figure>\n\n\n\n

BIS Raises Red Flags<\/h2>\n\n\n\n

The BIS, often described as the central bank for central banks, emphasized that stablecoins lack the reliability, stability, and regulatory backing of sovereign currencies. According to the institution, the very premise of stablecoins offering a stable value is misleading. Many of them are pegged to fiat currencies like the U.S. dollar or euro but do not enjoy the same guarantees of liquidity, convertibility, or legal tender status.<\/p>\n\n\n\n

“Stablecoins may appear to offer price stability, but they are only as robust as the governance framework and the quality of reserves that support them,” the BIS said in its report. It further noted that several major stablecoins have suffered from price volatility and redemption issues, especially during times of market stress.<\/p>\n\n\n\n

The BIS made it clear that private issuers of stablecoins should not be allowed to take on roles traditionally reserved for central banks or licensed financial institutions. The report criticized the idea that stablecoins could serve as a reliable medium of exchange, store of value, or unit of account all key attributes of money.<\/p>\n\n\n\n

According to the BIS, stablecoins introduce fragmentation into the monetary system and could undermine financial stability if widely adopted without proper oversight. It added that even the most well-known stablecoins, like Tether (USDT) and USD Coin (USDC), remain vulnerable to systemic risks due to insufficient transparency and regulatory gaps.<\/p>\n\n\n\n

Call for Regulatory Action<\/h2>\n\n\n\n

The BIS report includes a strong call to action for global regulators and policymakers. It recommended imposing strict requirements on stablecoin issuers, including full transparency of reserves, mandatory licensing, redemption guarantees, and regulatory capital standards\r\n \r\n \r\n \r\n <\/g>\r\n \r\n \r\n \r\n <\/clipPath>\r\n <\/defs><\/svg><\/span><\/a>. It also warned against allowing stablecoins to be used at scale in mainstream payments.<\/p>\n\n\n\n

“Authorities must prevent stablecoins from gaining traction in ways that could impair the integrity of the monetary system,” the BIS stated. “They should be subject to the same level of supervision and risk management frameworks as traditional financial institutions if they are to operate at scale.”<\/p>\n\n\n\n

Push for Central Bank Digital Currencies (CBDCs)<\/h2>\n\n\n\n

Interestingly, the BIS used the opportunity to promote central bank digital currencies (CBDCs)<\/a> as a safer and more reliable alternative to stablecoins. The organization reiterated its support for the development of CBDCs, highlighting their potential to offer digital convenience without compromising monetary sovereignty or financial stability.<\/p>\n\n\n\n

The report reinforces the BIS's longstanding position that the future of digital money should be led by public institutions rather than private tech or crypto firms. As the stablecoin market continues to expand, the BIS's message is clear. While digital innovation is welcome, it must be built on solid foundations that preserve the integrity of the global monetary system.<\/p>\n","protected":false},"excerpt":{"rendered":"

The Bank for International Settlements (BIS) has issued a strong warning about stablecoins, asserting that they are not suitable substitutes for traditional forms of money. In a newly released report, the central banking institution argued that stablecoins, despite being pegged to national currencies, fail to deliver the fundamental qualities of sound money and should face […]<\/p>\n","protected":false},"author":50,"featured_media":102968,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21],"tags":[202,132,7819,1502,12248],"class_list":["post-102967","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","tag-blockchain","tag-crypto","tag-crypto-regulation-2","tag-regulation","tag-stable-coin-2"],"jetpack_featured_media_url":"https:\/\/coinscreed.com\/staging\/wp-content\/uploads\/2025\/06\/Tower-by-drone_2681.jpg","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/posts\/102967","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/users\/50"}],"replies":[{"embeddable":true,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/comments?post=102967"}],"version-history":[{"count":0,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/posts\/102967\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/media\/102968"}],"wp:attachment":[{"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/media?parent=102967"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/categories?post=102967"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/tags?post=102967"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}