BIS GM Pablo Hernández de Cos on Stablecoin Payment Limits
BIS General Manager outlines regulatory and operational limits on stablecoins for everyday payments, including interoperability, AML controls, bank funding, and monetary sovereignty.
BIS General Manager Pablo Hernández de Cos stated that stablecoins lack the interoperability and consistent AML controls needed for everyday payments at scale.
Singleness of Money and Bank Funding
De Cos noted that stablecoins can undermine the singleness of money because users cannot always move between different products without selling one asset and buying another. He added that a shift of deposits from banks into stablecoins could raise bank funding costs and tighten lending conditions for households and businesses.
Monetary Sovereignty Concerns
He highlighted risks of digital dollarization affecting monetary sovereignty outside the United States. Heavy use of dollar-pegged stablecoins could reduce the effectiveness of local monetary policy in other jurisdictions.
Tokenized Deposits and Standards
De Cos contrasted stablecoins with tokenized bank deposits and called for better redeemability and cross-chain standards. He cited Wyoming’s Frontier Stable Token as an example of public-sector experimentation while stressing gradual steps.
Unknowns
No specific timelines or quantitative impact estimates were provided in the statement.