BIS Calls Stablecoins “Unreliable”

? Stablecoins fail to meet key monetary criteria and cannot ensure financial system stability – this is the conclusion of a recent report by the Bank for International Settlements (BIS).

According to the document, stablecoins fail the test for:

• Unity (unit of account) – lack of a universal means of valuing goods and services in the economy
• Elasticity – inability to adapt to fluctuations in money supply and demand
• Integrity – vulnerability to risks ranging from technical failures to lack of transparency and regulation

BIS experts argue that although the idea behind stablecoins is to offer a “stable” alternative to fiat currencies, in practice they fall short of basic monetary functions: they don’t serve well as a store of value, are inconvenient as a unit of account, and are highly exposed to volatility.

It is also emphasized that even the most well-known stablecoins – like USDT and USDC – are centralized, dependent on issuers and their reserves, and may not always be 100% backed.

? However, not everyone agrees with this view.
Jim Walker, Chief Economist at Aletheia Capital, called BIS’s statement “hysterical.” According to him, criticizing stablecoins as unreliable is hypocritical coming from central banks – institutions with a long track record of monetary policy failures. Walker pointed to historical examples of hyperinflation, currency crises, and the erosion of trust in fiat money.

Context:

• Stablecoins are often used as fiat alternatives in countries with unstable economies
• Regulators frequently raise concerns over opaque reserves and systemic risks posed by these digital assets

? Conclusion:
The tension between digital assets and traditional institutions continues. While BIS supports the development of CBDCs – central bank digital currencies – the market and users still favor decentralization and freedom of choice.