The Bank for International Settlements (BIS) has declared stablecoins unfit as money because they fail its three tests: singleness, elasticity, and integrity. Instead, BIS points to tokenised deposits and central bank reserves, stitched together on a “unified ledger,” as the right path forward.
While that vision has merit (bringing stablecoins’ key features of 24/7 settlement, programmability, composability with digital services, and frictionless cross-border reach to the core) it underplays several critical realities.
📈 Market reality
Stablecoins first thrived as crypto liquidity. Their adoption far beyond that niche shows a clear demand for programmable, always-on, global money. The market is moving now, while central banks are still prototyping. A credible roadmap for large-scale rollout is missing. Private coins risk entrenching themselves before public alternatives are ready.
🌐 Geopolicy
$-pegged stablecoins (nearly 300B in circulation) have a geopolitical edge. They support the $ role as international currency (90% of global FX trades and 50% of international invoices are in $) at a time when other powers try to build up alternatives. Secondly, $-stablecoins add steady marginal demand for Treasuries, helping the US finance its deficit. Tether alone holds 100–125B, about 2% of the T-bill market.
🤝 Inclusion
Roughly 1.4 billion adults worldwide remain unbanked. Stablecoins enable many of them to hold and transfer digital dollars using only a phone and internet connection, bypassing account-opening frictions and operating 24/7. Properly regulated issuers can embed compliance natively into wallet domains and gateways, making financial inclusion and oversight mutually reinforcing. Until traditional rails can replicate this accessibility, BIS risks overlooking a real-world value driver.
🛡️ AML/CFT
BIS highlights pseudonymity as a flaw. Yet permissionless blockchains provide more traceability than the fully anonymous medium of cash. Once issuers are regulated under banking licenses, AML/CFT obligations apply just as to deposits. Combined with on-chain analytics, enforcement can even be stronger.
⚠️ Concentration risk
Who would govern such a unified ledger shared infrastructure? How to ensure resilience against cyber or political capture? BIS sketches subnet and layered models, but governance and operational risks remain underexplored. Never put all your eggs in one basket.
🔮 Resilient private stablecoins
Even if the BIS solution were fully and globally implemented, a business case for private stablecoins would remain:
– Permissionless DeFi use
– Censorship-resistant “cash-like” money
– Long-tail innovation on public chains (liquidity across ecosystems)
– Novel programmable assets not yet absorbed into regulated ledgers
