BIS Secretary General Points Out Challenges for Stablecoins as Large-Scale Payment Methods
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The Secretary General of the Bank for International Settlements (BIS) has claimed that stablecoins in their current form do not meet the fundamental requirements for functioning as large-scale payment methods. According to a speech released by the BIS on the 28th, Pablo Hernández de Cos made this statement at the Jackson Hole Economic Policy Symposium. He identified three issues that need to be addressed for stablecoins to function reliably. The first is the singularity of the currency and the elasticity of liquidity. For example, if a user holding USDT only accepts USDC, they must sell USDT in the market to buy USDC, which poses a risk of the stablecoin's market price deviating from one dollar during this process. The second issue is the interoperability between blockchains and the finality of payments. Stablecoins issued on different blockchains are not directly compatible, requiring separate bridges for transfer. The third issue concerns financial integrity, including anti-money laundering (AML) and counter-terrorism financing (CFT) regulations. He pointed out that the pseudonymity of public blockchains and the increase in transactions through personal wallets make it difficult to apply existing AML and CFT regulations in traditional finance. The BIS assessed that tokenized deposits are more suitable for leveraging the advantages of blockchain technology while maintaining the reliability of the existing financial system compared to stablecoins. However, it added that tokenized deposits have not yet reached a commercial stage.
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