Banks Advance Plans to Create Stablecoins as Bank for International Settlements Questions Their Role

Despite the Bank for International Settlements (BIS) chief's view that stablecoins cannot be considered money on a large scale, the world's largest banks are moving financial settlements and regular transactions onto public blockchains.

Speaking at the Economic Symposium in Jackson Hole on August 28, BIS General Manager Pablo Hernández de Cos stated that a system based on tokenized deposits "looks more promising" than stablecoins. BIS representatives emphasized that tokenized deposits should form the foundation of modern digital payment systems as banks transition their operations to blockchain.

For banks, the dilemma is straightforward: should they adopt blockchain now, or wait for regulators to approve a more technologically advanced version of this innovative solution?

Where Stablecoins Fall Apart, According to de Cos

De Cos's argument centers on three properties he says money must possess: uniformity, interoperability, and financial integrity.

Regarding uniformity, he gave a simple example. If one person holds Tether's $USDT tokens and wants to transfer money to a recipient who only accepts Circle's $USDC tokens, that person would first have to sell $USDT and buy $USDC. However, since the coins' prices can fluctuate on the market, the final transfer amount might not equal one US dollar. The system does not guarantee that two stablecoins will exchange one-for-one.

The interoperability issue creates another problem. Most fiat-backed stablecoins operate on fragmented, permissionless public blockchains and scaling layers. Even a request to transfer the same stablecoin issued on different blockchains from one chain to another requires performing complex—and sometimes costly—procedures.

In contrast, the settlement process for tokenized deposits involves using central bank accounts, as de Cos noted, preserving the nominal redeemability and finality of such deposits.

The Integrity Issue BIS Keeps Returning To

The third issue is financial integrity. According to de Cos, information shows that most stablecoins are currently held in self-custodied wallets and that an increasing number of transfers between blockchain wallets are conducted without any platform performing "Know Your Customer" (KYC) checks. This is vastly different from traditional finance, where bank deposits, the least anonymous form of money, predominate.

In its Annual Economic Report on June 23, the Bank for International Settlements (BIS) presented a similar viewpoint. In the section on stablecoins, it went so far as to state that existing stablecoin designs "do not meet the fundamental properties of money and threaten financial integrity."

Furthermore, the research expressed concern about the concept of "stablecoin dollarization" in developing countries, where the demand for foreign stablecoins could impact capital flows and reduce their monetary sovereignty.

What Payment Data Actually Shows

The discussion on scale is backed by significant figures.

According to an analytical report published in January 2026 by Boston Consulting Group (BCG) and blockchain data analytics firm Allium, over $62 trillion worth of stablecoin transactions occurred on public blockchains in a year. However, of this amount, only about $4.2 trillion (approximately 7% of the total) represented payments made in the real economy.

BCG estimated the observed volume of bilateral payments for goods and services in 2025 to be between $350 and $550 billion, which they termed a minimal figure. Additionally, the article noted that the stablecoin market capitalization grew to $307 billion by December 2025.

Why Are Banks Shifting Policy at All?

These warnings have not stopped banks from moving towards blockchain adoption.

On August 28, Forkast reported that a consortium of over 12 global banks, including Bank of America, Wells Fargo, Santander, Citi, Goldman Sachs, and UBS, is preparing to issue its own stablecoin on public blockchains, rather than leaving the market to Tether and Circle.

The GENIUS Act, which took effect on July 18, 2025, was a legislative measure allowing banks to access the federal level through subsidiaries approved by the Office of the Comptroller of the Currency (OCC), although it prohibited issuers from paying any interest to holders.

Bank of America CEO Brian Moynihan warned that up to $6 trillion in deposits could be withdrawn from banks if stablecoin issuers were allowed to offer yields.

"If it is legalized, we will engage in this business."

Smaller lending institutions are also adopting new technologies. Cryptopolitan reported that 39 state bankers' associations have formed the BankChain Alliance, set to launch in 2027. This initiative aims to provide local banks with shared access to tokenized deposits and stablecoins without relying on crypto platforms.

Are Banks Moving from Research to Creating a Joint Stablecoin?

Today's article in the Seoul Economic Daily states that a major banking group is considering initially issuing a dollar-pegged token, with subsequent expansion to G7 currencies. It also highlights the strategic reason: banks fear stablecoins could divert deposits away from traditional banks.

Central banks want to see tokenized deposits and central bank money at the heart of the blockchain economy, while commercial banks are increasingly concluding that they also need stablecoins. Notably, JPMorgan's position remains that the company has no current plans to issue a stablecoin.