BIS Chief De Cos Says $315 Billion Stablecoin Market Unfit for Core Payments

De Cos Sets Three Tests

Bank for International Settlements General Manager Pablo Hernández de Cos argued on August 28 that stablecoins cannot credibly serve as a means of payment at large scale, delivering the assessment in a speech at the Jackson Hole economic policy symposium hosted by the Kansas City Fed in Wyoming. Speaking before an audience of global central bankers, de Cos — whose institution counts 63 central banks and monetary authorities among its members — said stablecoins fall short on each of the three properties a currency is expected to satisfy: singleness, interoperability and soundness. Singleness, the guarantee that one unit of a currency exchanges at par for another, fails because stablecoin transfers are not finally settled on a central bank's books; if confidence in an issuer wavers, the token can drift materially below its face value. Interoperability breaks down when the same coin circulates across separate blockchains, on networks like Solana, without the ability to move directly between ledgers. Soundness is compromised, he added, because flows through self-managed wallets — where users can approve transfers via blind signing — sit largely outside anti-money-laundering and counter-terrorist-financing controls. The remedy, in his framing, is tokenized deposits: bank-issued tokens settled through central bank reserves on the interbank leg, which preserve singleness by design. He described that route as a more direct way to capture tokenization's benefits while keeping the monetary system's foundation intact, and said the two models can coexist if roles are clearly divided — deposits carrying the bulk of retail and wholesale settlement, stablecoins confined to narrower uses. The full speech text is published on the BIS website. De Cos, viewed as a candidate to succeed Christine Lagarde at the ECB in 2027, has emerged as the most prominent institutional voice pressing this position.

FSI Briefs 33 Flags Group-Level Loopholes

The day before the speech, the BIS's Financial Stability Institute published FSI Briefs 33, a cross-jurisdiction comparison of issuer rules that undercuts the idea of a coherent global framework. The report finds that banks are permitted a wide range of activities under existing prudential regimes, while rulebooks written specifically for stablecoin issuers restrict the issuer's business scope far more tightly. That tighter constraint, however, attaches only to the issuing entity itself and does not extend across the corporate group, meaning a nonbank issuer can, depending on its structure, route restricted activities through affiliates and sidestep the limits. The FSI's conclusion is that supervision of large nonbank issuers should cover the entire corporate group, not just the issuing company. The regulatory push is advancing in parallel: the United States enacted the GENIUS Act for payment stablecoins in July 2025, and the Treasury published its first proposed rules under the statute in April 2026. Washington's framing differs sharply from Basel's — Treasury Secretary Scott Bessent has championed stablecoins as a “digital financial revolution” that supports the dollar's reserve-currency standing and lifts demand for US Treasuries. De Cos's objection centers on the funding side: if deposits migrate into tokens that can pay holders yield-like returns without a bank in the middle, the same spread dynamic DeFi users know from yield farming, banks lean more on costlier wholesale funding, the burden passes through to borrowers as higher lending rates, and credit to weaker small and medium-sized enterprises shrinks first. Abroad, he warned, broad adoption of dollar-pegged stablecoins can erode a country's currency sovereignty and blunt the transmission of its own monetary policy. For now, the shift remains contained — BIS analysis put the stablecoin market cap at roughly $315 billion in early April 2026, with actual payment use still a small fraction of traditional rails. Readers tracking the market in real time can follow live spot and futures prices on Gate.

Tokenized Deposits Get the Nod

COINOTAG's reading: this is not regulatory FUD aimed at the asset class, but a boundary-setting exercise. The primary documents — the August 28 Jackson Hole speech and the August 27 FSI brief — agree on one load-bearing point: the BIS wants tokenized deposits, settled in central bank money, to carry the bulk of daily payments, with stablecoins pushed to a narrower perimeter. For issuers, the actionable risk is the group-level supervision the FSI is proposing; for Treasuries outside the United States, it is digital dollarization. How far Washington's GENIUS Act rulemaking accommodates — or ignores — the BIS position will test whether these two visions of tokenized money can actually share the same rails.