BIS Chief Likens Stablecoins to Investment Products, Calls for Global Regulation

BIS Pushes for Unified Stablecoin Regulation

The Bank for International Settlements (BIS) has renewed its call for coordinated global regulation of stablecoins. General Manager Pablo Hernández de Cos drew a direct comparison between fiat-pegged crypto assets and exchange-traded funds, pointing to persistent redemption challenges and frequent price deviations from their intended peg, according to Reuters.

The BIS chief highlighted the significant market concentration in the stablecoin sector. USDT and USDC together account for approximately 85% of total issuance, which has now surpassed $300 billion in aggregate volume.

Why This Matters

BIS serves as a coordinating body for central banks worldwide, and its stance on stablecoins could significantly influence the regulatory trajectory across multiple jurisdictions. Classifying stablecoins as investment instruments rather than payment tools would fundamentally alter compliance requirements for issuers and reshape how users interact with these assets.

De Cos outlined several critical risks associated with the stablecoin market:

• Fiat-pegged assets could undermine the effectiveness of monetary policy;
• Divergent national regulatory frameworks create opportunities for regulatory arbitrage;
• Mass redemption events could trigger broader financial market stress.

Proposed Safeguards

To mitigate these threats, the BIS General Manager suggested a set of measures. He proposed that stablecoin issuers should gain access to deposit insurance schemes and central bank credit facilities — mechanisms traditionally reserved for regulated financial institutions.

De Cos also endorsed a prohibition on interest payments on stablecoins. The rationale behind this proposal is to prevent capital flight from traditional bank deposits, which could destabilize the conventional banking system.

Real-World Stablecoin Adoption Continues to Grow

Despite the cautionary tone from BIS, stablecoin usage in the real economy is expanding. Joint research by BVNK, Coinbase, and Artemis found that these assets are increasingly being used for payments, payroll, and savings — functions traditionally served by the banking sector.

Adding to the growth narrative, Chainalysis analysts suggested in April that stablecoin transaction volume could reach $1.5 quadrillion by 2035 — a figure that would rival the throughput of major legacy payment networks.

BIS has previously labeled stablecoins as "unreliable money," maintaining a consistently skeptical posture toward this asset class. Yet the accelerating adoption of stablecoins for everyday financial activities presents regulators with the challenge of balancing risk mitigation against the potential benefits of payment innovation.