All articles are carefully reviewed and reviewed by leading blockchain experts and industry experts.
• BIS says stablecoins are at risk of splitting the global financial system.
• Officials warn dollar-backed tokens could weaken monetary authority.
• The organization is promoting Project Agorá as an alternative.
The Bank for International Settlements (BIS) has stepped up its criticism of private stablecoins, warning that they could destabilize the global financial system and introduce new risks to financial stability. In the 2026 Annual Economic ReportThe organization says that digital currencies that are issued privately cannot provide the main indicators of independent money and instead promote a decentralized system of communication built around central banks and commercial banks.
BIS Questions Stablecoins’ Ability to Work as Money
The Basel-based organization argues that stablecoins fail to fulfill one of the most important features of modern financial systems: “non-currency.”
Under today’s financial system, a unit of sovereign money has the same value regardless of whether it is interbank money, bank deposits or real money. According to the BIS, privately issued stablecoins may not always guarantee the spot as they may trade above or below their peg during market crises.
The report states that stablecoins operate on multiple public blockchains that are often isolated from each other. Instead of creating a unified payment system, the system creates a digital ecosystem, or what the BIS describes as “walled fields,” where funds, users and applications remain fragmented across competing ledgers.
Officials argue that this lack of cooperation reduces competition, lowers wages and creates disunity.
The BIS also warns that a large redemption of stablecoins could force investors to liquidate their assets, including US Treasury bills, making financial markets more vulnerable to rapid trading during periods of financial instability.
Dollar-Represented Tokens Raise Disturbing Authority
Another major concern highlighted in the report is the growth of US dollar-backed stablecoins in emerging and developing countries.
The BIS notes that households and businesses in countries experiencing high inflation or a weakened domestic currency are using fixed-dollar currencies to maintain purchasing power and manage international transactions.
While these activities may provide economic benefits to users in the short term, the agency argues that mass adoption can reduce the effectiveness of domestic financial policies by shifting savings and payments away from local currencies.
According to the report, the continued growth of fixed income supported by the dollar could accelerate the growth of digital currencies, restructure the global financial system and increase price volatility, ultimately weakening the ability of central banks to control inflation and contribute to economic stability.
Project Agorá Offers a Different Example
Instead of opposing tokenization itself, BIS promotes the integration of blockchain technology into the existing financial system through Project Agorá.
The project brings together eight central banks and more than 40 financial institutions to create a joint ledger that can support potential payments and stability across borders.
Under the proposed framework, tokenized reserves of the central bank will serve as the basis for settlement, while commercial banks will offer tokenized deposits that remain fully exchangeable and self-governing currencies.
BIS says the system preserves two existing banks while offering many of the benefits of blockchain-based technology, including speed, stability and 24-hour processing.
Unlike privately-issued stablecoins that circulate in different blockchains, a unified ledger is designed to provide a means of communication that different financial institutions can easily perform.
Regulators Call for Uniform Rules Around the World
The report comes alongside new calls for international cooperation.
Earlier this week, the BIS Financial Stability Institute urged policymakers to improve the use of stablecoins around the world, warning that the country’s fragmented regulations could encourage regulatory inconsistency and widen the economic divide.
The organization argues that inconsistent regulations would make border management more difficult while allowing stablecoin issuers to operate under different regulations across jurisdictions.
The report highlights a growing divide in international policy-making. While jurisdictions including the United States have embraced crowd-sourced stablecoins as part of their digital initiatives, the BIS continues to promote central bank-backed bank deposits as the basis for future digital payments.
As governments increasingly embrace the next generation of financial infrastructure, the debate is expanding beyond technology to include broader questions about financial governance, system stability and who should control the issuance of digital currency.
