Bank for International Settlements General Manager Pablo Hernández de Cos said stablecoins still do not meet the standard of credible money at scale, arguing that tokenized deposits should carry most day-to-day payments instead.
Speaking at the Jackson Hole Economic Policy Symposium on August 28, de Cos said the case against broader reliance on stablecoins rests on four weaknesses: par redeemability, elasticity, interoperability and financial integrity. His remarks placed the debate over digital money in the context of monetary stability and public policy rather than market growth alone.
Four shortcomings at the center of the BIS view
De Cos said stablecoins continue to fall short as real money because they do not yet satisfy several core monetary functions in a reliable way. He singled out par redeemability, meaning confidence that a token can consistently be exchanged at face value, as one of the central problems.
He also pointed to elasticity, interoperability and financial integrity. Taken together, those issues suggest that even as stablecoins become more widely used, the BIS does not see them as matching the characteristics needed for money to function smoothly at large scale across the broader economy.
Market growth has not changed the BIS assessment
The speech came as the global stablecoin supply has climbed to about $308 billion. Tether’s USDT accounts for roughly 60% of that total, underlining how concentrated the sector remains even as issuance has expanded.
Despite that growth, de Cos argued that scale by itself does not resolve the underlying monetary questions. The BIS position, as presented in the speech, is that wider adoption should not be treated as proof that stablecoins can already serve as a dependable foundation for everyday payments.
Tokenized deposits preferred for everyday payments
Instead of putting stablecoins at the center of retail and routine transactions, de Cos urged central banks to prioritize tokenized deposits. He described them as a more direct way to capture the benefits of tokenisation while preserving the basic structure of the monetary system.
That framing reflects a broader BIS preference for adapting existing bank-based money into tokenized form rather than relying on privately issued tokens to perform core payment functions. In de Cos’s telling, tokenized deposits are better aligned with maintaining monetary stability as digital finance develops.
Sovereignty and public-finance concerns remain
De Cos also warned that dollar-pegged stablecoins raise concerns about monetary sovereignty and digital dollarization. The implication is that heavy use of such instruments outside the United States could deepen dependence on the dollar in digital payment networks and weaken local monetary control.
His speech further suggested that stablecoin activity could be steered toward U.S. Treasuries, potentially helping reduce government borrowing costs. That links the debate over whether stablecoins qualify as money to a second policy question: how their reserve structures may affect public financing.
What the BIS position points to next
The remarks signal support for tighter monetary-integrity standards before any endorsement of broader stablecoin use. Rather than treating current issuance growth as sufficient validation, the BIS view remains that the sector must first address the failures identified in redeemability, elasticity, interoperability and integrity.
For now, the clearest policy direction from de Cos is the call for central banks to focus on tokenized deposits for everyday payments while scrutiny of stablecoins continues, especially where dollar-linked tokens could affect domestic monetary autonomy.
Source: news.bitcoin.com