Stablecoins lack credibility for use in large-scale payments, according to Pablo Hernández de Cos, a senior central banking official who chairs the Basel Committee on Banking Supervision. His remarks coincide with a new study from the Bank for International Settlements’ (BIS) Financial Stability Institute (FSI) that highlights significant differences in how jurisdictions regulate stablecoin issuers.
Stablecoins questioned for payments at scale
Hernández de Cos said stablecoins have not demonstrated the reliability required for high-volume, everyday payments. The concern reflects long-standing policy questions over the stability of pegs, liquidity under stress, and the operational resilience of privately issued tokens when used beyond trading and settlement within crypto markets.
Global authorities have warned that run risk, imperfect reserves, and fragmented oversight could hinder stablecoins’ performance in mainstream payment rails, particularly during periods of market volatility.
FSI study flags fragmented issuer rules
The FSI’s new analysis underscores how uneven regulatory frameworks complicate both compliance and cross-border usage. According to the study, rules governing stablecoin issuers vary widely across jurisdictions, including in areas such as:
- Licensing and legal classification of tokens and issuers
- Reserve composition, custody, and segregation of assets
- Redemption rights, timelines, and transparency obligations
- Capital, liquidity, and risk management requirements
- Supervisory oversight and disclosures, including audits and attestations
These differences create uncertainty for issuers and users, and may limit the scalability of stablecoins for retail or wholesale payment use cases.
Policy backdrop and market implications
The BIS and other global standard-setters have pushed for clearer, more consistent rules for stablecoins, alongside work on central bank digital currencies and instant payment systems. While several major jurisdictions are advancing new regimes, divergent approaches remain a challenge for any stablecoin seeking broad, cross-border payment adoption.
The latest comments and the FSI’s findings reinforce a central policy message: without robust, harmonized regulation and demonstrated resilience, stablecoins are unlikely to meet the credibility threshold required for payments at scale.