TechFlow news, June 25 — According to The Block, the Bank for International Settlements (BIS) stated in its annual report released on Tuesday that stablecoins have failed three "key tests" required to serve as pillars of the monetary system: singleness, resilience, and integrity.
The report noted that while stablecoins offer advantages such as programmability, anonymity, and easy access for new users, their design prevents them from passing the resilience test, as assets like Tether's USDT require "full pre-funding" for issuance. Additionally, because stablecoins are typically issued by centralized entities with inconsistent standards, they fail to achieve the "singleness" required of money.
BIS also warned that stablecoins could undermine government monetary sovereignty through "stealth dollarization" and might facilitate criminal activities. Nevertheless, BIS expressed optimism about the tokenization of central bank reserves, commercial bank money, and other traditional assets, calling it a "transformative innovation."
