The Bank for International Settlements (BIS) has released a report asserting that stablecoins cannot effectively function as real money within the modern financial system. According to the BIS Annual Economic Report 2025, stablecoins do not meet essential criteria of ‘singleness,’ ‘elasticity,’ and ‘integrity.’ The BIS categorizes stablecoins as ‘digital bearer instruments’ that inherently resemble financial assets rather than actual money. The report highlights their volatility, contrasting with central bank-backed money, which is universally accepted at fixed rates. It suggests stablecoins struggle to absorb shocks and fulfill payment demands under liquidity constraints. Furthermore, the report criticizes stablecoins for their vulnerability to money laundering and financial crime due to their design, particularly in unhosted transactions. Although stablecoin usage is rising, the BIS advocates for a limited and regulated role for these instruments in society. While the report articulates concerns over unsound money, it also recognizes tokenization as a transformative innovation for future financial systems. The critical tone toward stablecoins led to a notable decline in shares for Circle, the issuer of USDC, following the BIS report's release.

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