Until demands stricter restrictions on stablecoins: failed as money
A new report by the Bank for International Payment Compensation (BIZ) questions the idea that stable coins can serve as money in a modern financial system.
Sea The BIS Years Economic Report 2025 does not exist the basic tests of “uniqueness”, “elasticity” and “integrity”. These are three crucial criteria that define effective financial instruments.
BIZ describes stablecoins as “digital owner instruments” that are more like financial investments than actual money. “Stablecoins are doing badly when evaluating the three tests for the function as the main support of the monetary system,” said the report.
In contrast to money from the central bank, which is accepted “to the nominal value” and does not require a review of the background, Private facilities issue stable coins and often act to fluctuate courses. This undermines the basic principle of the uniformity of the currency, according to the report.
Read too: Polymarket estimates the probability of StableCoin law to 89 percent
Stablecoins: Tests on elasticity and integrity failed
Elasticity, the second test, is crucial for the absorption of shocks and covering the need for large amount payments, according to the BIZ in its report.
She pointed out that “every additional offer of stable coins requires a complete advance payment by the owners” and compared this with a “strict advance payment”, which is, in contrast to the flexibility of modern banking systems, in which central banks provide liquidity if necessary.
The third and perhaps worst failure is in the area of integrity. The report states that the design of stablecoins, especially those who have not been hosted on public Blockchains to be handled, make them susceptible to financial crime.
“Stable coins have significant defects when it comes to promoting the integrity of the monetary system,” said BIZ. The bank emphasized the susceptibility to money laundering, sanction bypass and terrorist financing.
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Stable coins should play restricted role
The biz recognizes the ongoing demand for stable coins based on Captitudes However, like cross -border accessibility and lower transaction costs, however, argues that you should only play a limited, well -regulated role.
“Society can learn the historical lessons across the borders of unsolid money,” warns the report. “Courageous measures by the central banks and other public bodies can bring the financial system in partnership with the financial sector on the right track.”
The shares of Circle, the company behind USDC (USDC), fell by more than 15 % on Tuesday after the BIS report and reached $ 222. CRCL shares had an all-time high of $ 299 on Monday reached.
Despite its hard attitude towards StableCoins, the BIZ report praises the tokenization as a “transformative innovation” for the next generation money and financial system. The tokenization is building on the current financial system instead of replacing it.
Some in the crypto community said“It is” no surprise “that the biz report is generally negative compared to stable coins, since it was a” regulatory authority in the possession of the global central banks “.
“The biz is hysterical in its opposition to crypto”, wrote Jim Walker, chief economist at Aletheia Capital. “The first criterion, the support of a central bank, should make it a laugh number in the face of the historical failure of these institutions around the world.”
