Pablo Hernández de Cos, General Manager of the Bank for International Settlements (BIS), warned that wider use of stablecoins in their current form could create policy challenges from credit provision to monetary policy.
Speaking at a Bank of Japan seminar in Tokyo, he said stablecoins offer features such as programmability, atomic settlement and faster cross-border transfers, but remain limited in their broader financial role.
Stablecoins Still See Limited Real Economy Use
The BIS official noted that stablecoins are still used mainly within the crypto ecosystem for trading, collateral and access to US dollar-denominated assets.
Global stablecoin market capitalisation stood at about US$315 billion in early April 2026, while annual transaction volumes reached around US$35 trillion in 2025, but real economy payment use remains modest.
He added that payment-related stablecoin flows in 2025 were estimated at around US$390 billion, far below the roughly US$8 trillion held in US bank deposits alone.
He also argued that current stablecoin arrangements do not yet meet the requirements of a widely used payment instrument, citing issues around singleness, interoperability and redemption at par.
BIS Flags Risks to Credit, Monetary Policy and Financial Integrity
Hernández de Cos warned that broader adoption could affect credit supply, financial stability, financial integrity, monetary policy and fiscal policy.
A shift from bank deposits into stablecoins at scale, he said, could raise banks’ funding costs and tighten credit conditions.
He also pointed to run risk and said stablecoins on public blockchains and through unhosted wallets can weaken anti-money laundering and counter-terrorism financing controls by allowing activity outside the regulatory perimeter and without standard know-your-customer checks.
Japan was highlighted as an early mover on stablecoin regulation after amendments to its Payment Services Act in 2022, though Hernández de Cos noted that yen-pegged stablecoins remain very small compared with US dollar-pegged tokens.
BIS Calls for International Coordination on Rules for Stablecoins
Looking ahead, Hernández de Cos urged policymakers to address the risks of current stablecoin arrangements while bringing useful technological advances into the regulated financial system.
He pointed to work on tokenised deposits, central bank money as an anchor of trust, and Project Agorá.
Hernández de Cos concluded,
“As regulatory approaches are refined, I also want to emphasise the critical importance of international cooperation.
Without it, divergent regulatory frameworks for stablecoins across jurisdictions could lead to severe market fragmentation or enable harmful regulatory arbitrage.”
Featured image: Edited by Fintech News Singapore, based on image by mkmult via Freepik
