BIS says stablecoin scale still runs into fragmented issuer rulebooks and payment design
A BIS speech at Jackson Hole and a new FSI brief argue that stablecoins still struggle to meet the core tests of money at scale, even as issuer rulebooks diverge across major jurisdictions. That mix could shape how payment stablecoins, tokenized deposits and other tokenized cash instruments split the market from here.
The Bank for International Settlements is widening its argument against stablecoins just as lawmakers and supervisors are finally giving the sector a more formal rulebook. The latest push is not only about reserves or redemption risk. It is also about whether payment stablecoins can ever deliver the core properties of money at scale when issuance models, compliance controls and legal perimeters still vary meaningfully across jurisdictions. That makes this a market-structure story as much as a policy one.
In remarks delivered at the Jackson Hole Economic Symposium on Aug. 28, BIS General Manager Pablo Hernández de Cos framed the debate around two competing paths for tokenized money in advanced economies: fiat-referenced stablecoins and tokenized bank deposits. His core point was that money works because users can settle obligations at par, trust that liquidity will be available when needed and rely on common standards for integrity. On that test, he argued, stablecoins still fall short. The speech said tokenized deposits offer a more direct route to using programmable rails while preserving the foundations of the monetary system.
The speech lays out the case in practical terms rather than theory alone. Hernández de Cos used a simple example in which one user holds USDT while another accepts only USDC. In that setup, value transfer depends on swapping across instruments in a secondary market, where deviations from par can appear and widen under stress. He also pointed to fragmentation across base chains and scaling layers, which means even the same stablecoin can lose seamless interoperability as it moves across networks. Add in uneven anti-money-laundering controls and the BIS concern becomes clear: a token can be dollar-linked without functioning like a universally accepted dollar payment instrument.
That argument is landing alongside a new BIS-linked Financial Stability Institute brief published on Aug. 27. The paper reviews stablecoin issuer frameworks across the United States, the European Union, the United Kingdom, Hong Kong and Singapore, and concludes that the broad direction of travel is similar even though the legal boundaries are not. In most markets, the issuer is expected to stay close to a narrow payments function built around minting, redemptions and management of the backing pool. Where the rules split is over how much room remains for adjacent businesses like lending, staking, proprietary trading or third-party custody, all of which can change the risk that ultimately sits behind the token.
The U.S. approach is a useful example of where those boundaries matter. In April, Federal Reserve Governor Michael Barr said the GENIUS Act created needed clarity for stablecoin issuers but warned that the durability of the model would still depend on implementation details, including reserve quality, capital and liquidity standards, anti-money-laundering controls and the scope of permissible activities outside issuance itself. That lines up closely with the new FSI brief, which notes that restrictions often apply only to the issuing legal entity rather than the broader corporate group. For banks, consolidated supervision already captures more of that perimeter. For non-bank issuers, the BIS-linked researchers argue, a group can potentially shift risk into affiliates unless regulators extend oversight more broadly.
For RWA and tokenized-finance builders, the implication is not that stablecoins are going away. If anything, the policy fight shows how central they have become to market plumbing, treasury management and global dollar distribution. But the next phase of scale is likely to depend less on raw circulation growth and more on regulatory architecture: which issuers are allowed to combine payments with lending or custody, which jurisdictions tolerate broader group structures, and which forms of tokenized money are trusted for institutional settlement. In that environment, tokenized deposits, stablecoins and tokenized government-liquidity products may coexist rather than converge into a single winner.
That is why the BIS intervention matters beyond the usual stablecoin talking points. The debate is shifting from whether tokenized dollars are useful to what kind of tokenized money can carry the highest-trust parts of the financial system. Stablecoins already move real volume and remain deeply embedded in onchain markets. But if supervisors keep tightening the issuer perimeter while banks advance deposit-based models, the long-term prize may belong to the platforms that can combine programmability with stronger par settlement, interoperability and oversight.