BIS warns stablecoins are limited in use and urges global rules

In a BIS speech on April 20, Pablo Hernández de Cos said stablecoins have found limited commercial use. BIS data show the stablecoin market reached about $315B in market cap (April 2026) versus roughly $8T in U.S. bank deposits—casting the sector as small relative to mainstream finance. Hernández de Cos added that stablecoins are mainly used for on-chain trading inside the crypto ecosystem, while payments are limited to parts of global value chains. BIS also called for international cooperation due to divergent stablecoin regulations across jurisdictions. It warned that if stablecoins scale in their current form, they could create policy challenges across credit provision, monetary policy, and financial stability. The BIS cited risks to banks and financial integrity, and highlighted structural concerns: “singleness” (instability under stress) and “interoperability” issues (fragmentation rather than universally accepted money). Notably, BIS described major USD-pegged stablecoins—Tether’s USDT and Circle’s USDC—as operating more like securities than money, likening them to exchange-traded funds. The BIS remarks come as Japan has already amended its Payment Services Act (2022) and launched a yen-pegged stablecoin in Oct 2025. In the U.S., stablecoin regulation has advanced with the GENIUS Act (2025), while Circle’s CEO said China could launch a yuan-backed stablecoin in 3–5 years. For traders, the takeaway is clear: stablecoins face tighter scrutiny and potential reclassification risk, even as governments move toward clearer frameworks.