Bank for International Settlements (BIS) fires a salvo: stablecoins "do not meet sound currency standards", may fragment global financial system and weaken central bank sovereignty.

The Bank for International Settlements (BIS) issued a stern warning about stablecoins in its latest annual report, directly stating that privately issued digital tokens "do not meet the standards of sound money," and their rapid expansion could lead to fragmentation of the global monetary system, urging central banks to accelerate the promotion of tokenized central bank money and commercial bank money as safer alternatives for digital payments.
(Background: SWIFT says stablecoins are useless: Stablecoins will not disrupt existing finance because they only serve specific clients and scenarios)
(Background supplement: What will the "ultimate form" of the stablecoin chain be?)

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• Tokenized central bank money is the right answer
• Stablecoin market cap approaches $250 billion, regulatory pressure heats up
• Taiwan's central bank CBDC research remains in the proof-of-concept stage

The Bank for International Settlements (BIS) issued a strongly worded warning about stablecoins in its latest annual economic report, directly pointing out that private digital tokens led by USDT and USDC "do not meet the basic requirements of sound money," and that their rapid expansion could lead to fragmentation of the global monetary system and weaken the monetary policy dominance of central banks.

The BIS report pointed out that although stablecoins have demonstrated advantages in payment efficiency and cross-border settlement, their underlying design has fundamental flaws: a lack of final settlement guarantees, no central bank as a lender of last resort during liquidity crises, and the formation of closed silos across different blockchain networks, all of which prevent this "private money" from fulfilling the core functions of sound money.

Tokenized central bank money is the right answer

The report urges central banks and financial institutions to accelerate the development of "tokenized central bank money" and "tokenized commercial bank deposits" as alternatives to stablecoins. The BIS believes that only by tokenizing on the institutional foundation of the existing monetary system, including the central bank's final settlement function, deposit insurance, and KYC/AML compliance frameworks, can efficiency be improved without sacrificing monetary stability and financial integrity.

This stance is in line with the BIS's "Unified Ledger" vision promoted in recent years: integrating central bank money, commercial bank money, and tokenized assets on a shared platform to achieve atomic settlement and programmable payments.

Stablecoin market cap approaches $250 billion, regulatory pressure heats up

Currently, the total market cap of global stablecoins has approached $250 billion, with USDT and USDC together accounting for over 85% market share. The BIS is concerned that if stablecoins continue to grow at the current pace, central banks' control over domestic payment systems will gradually erode, especially in emerging markets, where dollar stablecoins have effectively become "shadow currencies" in some countries.

The report also reminds that public blockchains (such as Ethereum, Solana) serve as the settlement layer for stablecoins, and their decentralized verification mechanisms cannot provide the legal finality equivalent to a central bank's Real-Time Gross Settlement (RTGS) system, which could trigger systemic risks under extreme market stress.

Taiwan's central bank CBDC research remains in the proof-of-concept stage

It is worth noting that although the Central Bank of Taiwan has initiated CBDC research for many years, it is still in the proof-of-concept and technical testing stage, with no clear timeline for advancement. In comparison, China's digital yuan has covered 260 million wallet users, and the EU's digital euro has entered the preparation stage. If this BIS report gains international regulatory consensus, it may accelerate Taiwan's policy advancement in both the CBDC and stablecoin regulation tracks.

As of press time, USDT was trading at $0.9998, and USDC at $0.9999. The market has shown no significant reaction to the BIS report.