Claims vs. Reality: What the BIS Gets Wrong About Stablecoins

The Bank for International Settlements is out with its latest Annual Economic Report, and again it has devoted a chapter to arguing that stablecoins fall short on the foundational properties of money.

What stands out is how isolated that stance has become. Central bankers and policymakers are increasingly warming to stablecoins: IMF Managing Director Kristalina Georgieva has urged governments to "accept the reality" of digital money and to harness the opportunities of fast-growing stablecoins rather than resist them; Ulrich Bindseil, who led the ECB's market infrastructure and payments directorate until 2025, has argued in recent work that overly restrictive rules risk weakening Europe's competitiveness and holding back the benefits stablecoins can deliver; and Bank of England Deputy Governor Sarah Breeden speaks of a "world class" UK regime that will let people and businesses trust stablecoins as money. Yet the BIS chapter persists in seeing only the risks, and not the benefits.

Before getting into the specific objections, it is worth being clear about what stablecoins are and what they are already doing. Stablecoins are fully reserved digital money that settles on public blockchains. They are directly addressing the frictions in cross-border payments that the G20 has long identified as a problem — a system that is too slow, too costly, and too opaque. Stablecoins move value across borders in near-real time, around the clock, and at a small fraction of the cost.

Visa and Mastercard now settle transactions in stablecoins and are connecting them to their card networks; Stripe acquired the stablecoin platform Bridge and has rolled out stablecoin payments and accounts for businesses in more than 100 countries; and Shopify lets merchants accept USDC at checkout. Large retailers including Amazon and Walmart are reportedly exploring their own stablecoins to cut payment costs. When the incumbents of digital payments are integrating stablecoins into their own rails, the technology has moved well past the experimental stage.

They are also the natural money for the next wave of commerce. For agentic payments — especially high-frequency, machine-to-machine transactions — stablecoins move at the speed of code. Society needs tokenized money that can keep up with that activity and stay efficient even at very small amounts, and stablecoins do exactly that, supporting micropayments and fractional transfers that legacy rails cannot serve economically.

Businesses are voting with their wallets, drawn by genuine utility. Consumers want payments that are easy and rewarding, and stablecoins increasingly deliver exactly these. Policymakers should meet this moment by facilitating innovation rather than playing favorites among the technologies that serve it. The test of any monetary system is whether it meets the needs of society, and on that test, stablecoins are already proving their worth.

So let's take some key claims of the BIS chapter one by one, and examine them against a mid-2026 reality.

Claim: "The use of stablecoins remains modest." The BIS leans on a figure of roughly $390B in "real" stablecoin payments to argue that usage is negligible.

The reality is that the growth rate is what matters. That ~$390B is McKinsey and Artemis's own 2025 estimate of genuine stablecoin payments — and it more than doubled from 2024. The most serious use case is compounding fastest: business-to-business payments reached roughly $226B, about 60% of the total, growing 733% year over year. A figure that looks small against global payments today but doubles annually, led by businesses rather than speculation, describes an adoption curve, not a ceiling.

Claim: Stablecoins fail the "singleness" of money. The argument is that stablecoins can't guarantee par in all situations, and therefore fail the test that one unit of money should trade at par with another.

The reality is that singleness routinely deviates in the very system the BIS is defending. Pay a $2 fee to withdraw $20 at an out-of-network ATM and you have taken a 10% haircut on your "par" bank balance. Add interchange, FX spreads, and correspondent-banking costs, and par breaks all the time in incumbent money — yet no one concludes that commercial bank deposits are "not money." Deposits hold par when it matters because banks have central-bank backstops and standing facilities — the very access that some policymakers would deny stablecoins. Stablecoins deserve the same plumbing that produces par, rather than being faulted for the absence of access they have never been granted.

Claim: Stablecoins pose bank-like systemic risk. The concern is that large redemptions could transmit into funding markets, and that stablecoins should therefore be regulated like banks.

The reality is that a fully reserved stablecoin — backed by short-dated government securities and held bankruptcy-remote — does no maturity transformation, no leverage, and no credit creation. Those are the activities that make banks fragile, and a reserved stablecoin does none of them. The BIS's own modelling shows redemption risk is greatest precisely when reserves are held as wholesale bank deposits. That imports the frailties of banking; it does not reflect anything inherent to stablecoins. A high-quality, liquid reserve base mitigates the redemption channel rather than creating it.

Claim: Stablecoins are fundamentally underregulated, or even unregulatable. The chapter treats stablecoins as a category that sits largely outside the supervisory perimeter.

The reality is now the opposite. Payment stablecoins are governed by a purpose-built framework: full reserve backing in high-quality liquid assets, no lending or leverage against reserves, segregation of customer assets, regular attestation and audit, and ongoing supervision. In several respects that is tighter than what applies to fractional-reserve banks. "Unregulatable" describes the pre-GENIUS past — not the framework now in force across the US, EU, and UK through GENIUS, MiCA, and the UK regime.

Claim: Stablecoin growth will trigger deposit flight and damage bank lending. The worry is that money migrating into stablecoins drains deposits and starves bank lending.

The reality is that the empirical work has dispelled this fear. A 2026 White House Council of Economic Advisers analysis found that even restricting stablecoin yields would lift bank lending by only about $2.1B — roughly 0.02% of total loans — because most reserves stay inside the banking system, recycled into Treasuries and deposits. Charles River Associates and Will Cong point the same way, finding no meaningful impact on bank deposits. The chapter leans on a worst-case disintermediation channel the evidence does not bear out.

Claim: "Stablecoin dollarisation" will erode monetary sovereignty. The strongest macro claim is that foreign, mostly dollar, stablecoins will displace local currency in emerging markets and undermine monetary sovereignty.

The reality is that sovereignty is protected by showing up, not by sitting out. The chapter itself concedes that flows look similar whether or not countries restrict them, that controls are "imperfect," and that the pressure can sharpen incentives for sound domestic policy. Dollar demand in unstable economies long predates stablecoins; it is a symptom of weak domestic money, not a pathology that stablecoins introduce. Tokenization changes the speed and convenience, not the underlying demand. The greater risk is doing nothing: if the tokenized economy runs on dollar stablecoins and a jurisdiction has no domestic-currency option on those rails, dollarisation happens by default. The defense is not prohibition; it is issuing well-regulated stablecoins in your own currency — exactly what a "world class" sterling regime is meant to do.

Step back, and the through-line becomes clear. The BIS's preferred end-state is a central-bank-operated "unified ledger." That is one credible vision of the future of money, and it deserves to be argued on its merits. What it should not do is advance by holding private stablecoins to a standard the incumbent system itself would fail. The BIS's mission is to help central banks serve the public by facilitating innovation, not to play favorites. When it convenes flagship projects like Project Agorá around tokenized deposits and central-bank money but leaves out stablecoins — the one tokenized instrument already moving value at scale — it falls short of that mission.

That is why the divergence with the US and UK matters. Washington and London are not waving risk away. They are building regimes that capture the benefits — faster, programmable, lower-cost payments and broader competition — while managing reserve, redemption, and integrity risks through regulation. In doing so, they are hearing the voices of the end-users already choosing stablecoins, and meeting the needs of society rather than the preferences of incumbents. The question is no longer whether well-designed stablecoins can be money. It is how to regulate them so they are sound. We think the US and UK have the better read on it.