PaymentsJournal
No Result
View All Result
SIGN UP
  • Commercial
  • Credit
  • Debit
  • Digital Assets & Crypto
  • Digital Banking
  • Emerging Payments
  • Fraud & Security
  • Merchant
  • Prepaid
PaymentsJournal
  • Commercial
  • Credit
  • Debit
  • Digital Assets & Crypto
  • Digital Banking
  • Emerging Payments
  • Fraud & Security
  • Merchant
  • Prepaid
No Result
View All Result
PaymentsJournal
No Result
View All Result

Why the BIS Is Worried About Stablecoins

By Tom Nawrocki
April 20, 2026
in Analysts Coverage, Digital Assets & Crypto
0
0
SHARES
0
VIEWS
Share on FacebookShare on TwitterShare on LinkedIn
Stablecoins, sofi stablecoin

What Are Stablecoins, How Stable Are They, and Are They Safe? The Answers May Surprise You.

The Bank for International Settlements (BIS) has raised new concerns about stablecoins, especially given that two issuers dominate the global supply. BIS General Manager Pablo Hernandez de Cos emphasized the need for stronger international coordination on regulation, warning that firms may gravitate toward jurisdictions with weaker rules.

He cautioned that inconsistent regulatory frameworks could ⁠lead to market fragmentation or regulatory arbitrage. Speaking in Japan, he also warned that stablecoin runs could trigger broader financial stress, though such risks might be reduced through mechanisms similar to deposit insurance or central bank liquidity support.

De Cos argued that major stablecoins—primarily issued by Tether and Circle, which together account for roughly 85% of the $315 billion market—behave more like securities than money, comparing them to ETFs. He noted that market concentration could introduce redemption frictions and distort asset valuations.

Many Reasons for Concern

The BIS has also been advocating for central bank digital currencies (CBDCs) as a potential alternative for cross-border payments, placing them in indirect competition with stablecoins.

“Three Nobel Prize-winning economists, Jean Tirole, Paul Krugman, and Simon Johnson, have all raised strong concerns that echo the ones raised here by the BIS,” said Hugh Thomas, Lead Analyst, Commercial and Enterprise at Javelin Strategy & Research.

To Thomas’ point, they broadly argue that stablecoins could be prone to run-like dynamics if confidence in their backing weakens, while shifting money-like functions into private hands without a clear public-interest case. They also warn that regulation may not be robust enough for the scale envisioned, that widespread adoption could create spillover risks for funding markets and financial stability, and that stablecoins open new channels for money to move outside the traditional banking system’s oversight.

Explorations of Its Own

BIS is increasingly focused on shaping the future architecture of global digital money and payments. As a coordinating platform for major central banks, it’s working to improve efficiency and interoperability of cross-border payment systems in a more digitized financial environment.

These efforts are closely tied to its broader concerns about the rapid growth of stablecoins and the risks they may pose if left unevenly regulated. By exploring how CBDCs could operate on a shared platform alongside private digital assets, the BIS is testing alternatives that could reduce reliance on dominant stablecoin issuers.

Its work on initiatives such as Project Agora, which examines how tokenized bank deposits might be used in cross-border payments, points to a potential future where regulated public and private money systems compete or coexist under tighter global coordination.

0
SHARES
0
VIEWS
Share on FacebookShare on TwitterShare on LinkedIn
Tags: Bank for International SettlementsBISCircleStablecoinsTether

    Get the Latest News and Insights Delivered Daily

    Subscribe to the PaymentsJournal Newsletter for exclusive insight and data from Javelin Strategy & Research analysts and industry professionals.

    Must Reads

    Dual-rail recurring billing for agentic commerce

    Fueling Agentic Commerce with Dual-Rail Recurring Billing

    May 1, 2026
    credit union p2p

    How Should Legacy Banks Compete with Chime?

    April 30, 2026
    Prepaid cards for payroll and tipping

    Tips on a Prepaid Card: A Practical Solution with Broad Industry Impacts

    April 29, 2026
    credit-push fraud

    Inside the Battle Against Credit-Push Fraud: What’s Changing

    April 28, 2026
    real-time payments fraud

    Stopping Fraud in Real-Time Payments Before It Starts

    April 27, 2026
    Navigating Global Fintech Regulations Through Strategic Regulatory Arbitrage

    PACE Act Could Open Fed Payment Rails Beyond Banks

    April 24, 2026
    fraud agentic risks

    As Fraud and Agentic Risks Mount, Data Provides Continuity

    April 23, 2026

    Thirty Years and Counting: Bank of America Renews Alaska Air Deal

    April 22, 2026

    Linkedin-in X-twitter
    • Commercial
    • Credit
    • Debit
    • Digital Assets & Crypto
    • Digital Banking
    • Commercial
    • Credit
    • Debit
    • Digital Assets & Crypto
    • Digital Banking
    • Emerging Payments
    • Fraud & Security
    • Merchant
    • Prepaid
    • Emerging Payments
    • Fraud & Security
    • Merchant
    • Prepaid
    • About Us
    • Advertise With Us
    • Sign Up for Our Newsletter
    • About Us
    • Advertise With Us
    • Sign Up for Our Newsletter

    ©2026 PaymentsJournal.com |  Terms of Use | Privacy Policy

    • Commercial Payments
    • Credit
    • Debit
    • Digital Assets & Crypto
    • Emerging Payments
    • Fraud & Security
    • Merchant
    • Prepaid
    No Result
    View All Result