BIS: Stablecoins Are Not Fit to Replace Traditional Currency

The report, published on June 24, stated that these digital tokens do not meet the basic qualities expected from a national currency.

According to the BIS, money should be used uniformly everywhere, be flexible enough to respond to changes in demand, and be protected from misuse.

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First, the BIS said stablecoins fall short on "singleness", which means they do not always keep a fixed value. Unlike central bank money, which is accepted at the same rate by everyone, stablecoins often trade above or below their stated value.

Next is the issue of "elasticity", or how easy it is to adjust the supply of money when needed. The BIS explained that stablecoins cannot grow as quickly as demand requires. New tokens can only be created when users first pay for them in full.

The report also mentioned "integrity" as another issue. Many stablecoins, especially those used through unhosted wallets on public blockchains, are vulnerable to misuse. They pose a higher risk for illegal activity, such as money laundering or avoiding sanctions, because they can be used without identity checks.

Furthermore, the report warned that allowing stablecoins to grow without strict regulations could repeat past financial mistakes. The BIS called on central banks and regulators to step in and guide the system in a safer direction.

Meanwhile, the Bank of Korea (BOK) called for a slow and controlled introduction of stablecoins in the country. What did it say? Read the full story.