BIS Crypto Policy: Stablecoins, Tokenization and Banking

BIS crypto regulation focuses on keeping digital innovation compatible with financial stability, sound money and regulated banking. The Bank for International Settlements supports tokenization of central bank reserves, commercial bank money and financial assets, while warning that stablecoins need strong reserve, redemption, governance, AML/CFT and risk-management safeguards. The framework matters to financial institutions, stablecoin issuers, policymakers and crypto market participants.

Key Takeaways

• The BIS favors tokenization within a regulated two-tier monetary system built around central bank money and commercial bank liabilities rather than making privately issued stablecoins the core monetary anchor.

• The BIS identifies stablecoin weaknesses involving par-value stability, monetary elasticity, financial integrity and potential financial stability risks during large-scale redemptions.

• BIS research found cross-border Bitcoin, Ether and stablecoin flows peaked near $2.6 trillion in 2021, with stablecoins accounting for close to half of the volume.

• Stablecoin frameworks increasingly focus on safe reserve assets, redemption rights, governance, anti-money laundering controls and risk management, although requirements still differ across jurisdictions.

• In the United States, the GENIUS Act became law on July 18, 2025, creating a federal framework for payment stablecoins and prohibiting permitted issuers from paying holders interest or yield solely for holding the stablecoin.

Current BIS Crypto Regulation and Stablecoin Policy

The BIS examines crypto assets primarily through the functioning of the broader financial system rather than as a standalone asset class. Its policy work covers central banks, bank balance sheets, payment systems, financial stability, capital markets and cross-border transactions.

The BIS Annual Economic Report 2026 argues that widespread stablecoin adoption could create risks through large redemptions, changing money-market conditions and “stablecoin dollarisation” in emerging-market economies. Foreign-currency stablecoins may also affect capital flows, exchange rates and monetary sovereignty.

Stablecoins are designed to maintain a stable value relative to fiat currency or other assets, but the BIS notes that actual market prices can deviate from par during stress. Unlike commercial bank money, privately issued stablecoins also do not provide the same connection to central bank reserves and settlement finality.

Why BIS Prefers Tokenization Within the Banking System

The BIS sees tokenization as a potentially transformative technological improvement when the digital representation of money and traditional assets remains anchored in regulated institutions.

Its next-generation model combines tokenized central bank reserves, tokenized commercial bank money and tokenized government bonds on programmable infrastructure. The BIS next-generation monetary system framework describes this combination as a way to improve cross-border payments, securities settlement and capital efficiency without abandoning the institutional foundations of the traditional financial system.

Tokenization can combine messaging, reconciliation and settlement into one process. Smart contracts can add programmable logic governing when assets and money move, while delivery-versus-payment can reduce counterparty risk by coordinating both sides of a transaction.

The distinction is important because tokenized real-world assets, including government bonds, treasury bills and other financial instruments, still depend on enforceable ownership rights and legal frameworks even when transferred digitally.

Stablecoins, Cross-Border Payments and Emerging Markets

Stablecoins can make cross-border transactions faster by allowing digital value to be transferred directly across blockchain networks rather than moving through several correspondent banks. BIS research also finds that stablecoin flows are more closely associated with remittance costs and transactional demand in emerging-market and developing economies.

This can provide easier access to foreign currencies for migrant workers, businesses and other users facing high fees or limited banking access. However, the same mechanism can weaken capital controls or accelerate capital flight if households and businesses move from local bank deposits into foreign-currency stablecoins.

Recent BIS research also finds that stablecoin demand can spill into traditional foreign-exchange markets, with particularly significant effects where intermediary balance sheets and market liquidity are constrained.

BIS Requirements for Stablecoins and Bank Crypto Exposure

The BIS and Basel-based standard setters emphasize regulation proportional to the function and risk of a stablecoin arrangement.

For banks, the Basel cryptoasset exposure standard requires qualifying crypto assets with stabilisation mechanisms to have clearly enforceable rights, robust redemption arrangements, sufficient reserve assets, settlement finality and appropriate governance. Relevant entities must also manage credit risk, liquidity risk, operational risk and AML/CFT obligations.

Systemically important stablecoin arrangements may additionally fall within principles covering governance, comprehensive risk management, settlement and money settlements.

The regulatory direction therefore favors liquid and safe assets over illiquid reserve portfolios, particularly where a stablecoin issuer promises redemption at or near par.

GENIUS Act and Global Stablecoin Rules

The U.S. GENIUS Act, signed into law on July 18, 2025, added a statutory framework for payment stablecoins. Among other requirements, the law addresses reserves, redemption and supervision and prohibits permitted payment stablecoin issuers from directly paying interest or yield solely because a person holds the token.

International implementation remains uneven. A 2025 Financial Stability Board review found substantial policy development underway but significant differences between jurisdictions, particularly around stablecoin regulation.

That fragmentation matters because stablecoins, wallet providers and crypto markets frequently operate across multiple jurisdictions.

How Gate Can Help

Market participants studying how regulation affects stablecoins can compare the behavior of crypto assets and fiat-linked tokens through Gate Spot. Stablecoin prices can occasionally move away from their target value, so spread, liquidity and market depth remain useful indicators when assessing whether a token is maintaining its intended peg.

Gate's material on stablecoins as financial infrastructure also provides broader context on how payment use cases are developing alongside regulatory frameworks.

Conclusion

BIS crypto policy does not reject digital assets or distributed ledger technology. Instead, the BIS draws a distinction between technological innovation and the monetary architecture supporting it. Tokenization of central bank reserves, commercial bank money, government bonds and other assets fits more naturally within its preferred model, while stablecoins require strong regulation because reserve quality, redemption, governance, financial integrity and monetary sovereignty risks can become systemic as adoption grows.

FAQ

Does the BIS support stablecoins?

The BIS recognizes useful stablecoin applications, particularly in digital and cross-border payments, but does not view current stablecoin models as an adequate foundation for the core monetary system. Its concerns include par-value stability, elasticity, integrity and redemption risk.

Why does the BIS prefer tokenized bank deposits?

Tokenized deposits remain liabilities of regulated commercial banks and can settle within a monetary system ultimately anchored by central bank money. This preserves characteristics of traditional bank deposits while adding programmability and digital settlement features.

Can tokenization reduce settlement time?

Tokenization can shorten settlement by integrating asset transfer, payment, reconciliation and programmable execution on shared infrastructure. Actual settlement speed still depends on network design, legal requirements and whether final settlement assets are available on the same platform.

What assets can support regulated stablecoins?

Requirements differ by jurisdiction, but regulatory frameworks commonly emphasize liquid, low-risk reserve assets. Government securities such as Treasury bills and cash or equivalent instruments are frequently used because issuers must be able to meet redemption requests.

What is the main BIS concern about stablecoins in emerging markets?

The BIS highlights potential monetary-sovereignty and capital-flow risks. Widespread use of foreign-currency stablecoins could shift households and businesses away from domestic bank deposits and increase exposure to foreign monetary and financial conditions.