BIS general manager Pablo Hernández de Cos said US dollar stablecoins may pose risks to financial stability and urges stronger global coordination on regulation.
The Bank for International Settlements (BIS) general manager, Pablo Hernández de Cos, on Monday called for tighter global coordination on stablecoins, warning that US dollar-denominated tokens could have “material consequences” for financial stability and economic policy if they grow large enough to rival traditional money.
Speaking at a Bank of Japan seminar in Tokyo, he said current stablecoin arrangements fall short of what is needed for a widely used means of payment, even if they offer faster cross-border transfers and integration with smart contracts.
De Cos said the largest US dollar stablecoins, such as USDt (USDT) and USDC (USDC), share characteristics with investment products rather than cash-like money, pointing to fees and conditions on primary market redemptions and episodes where their prices diverge from par in secondary markets.
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