The annual economic report from the Bank for International Settlements (BIS) warns of possible transformations in the global monetary landscape. Published in Basel, the paper examines the role of stablecoins and their limitations in current financial systems. The institution highlights the risk of dollarization in certain emerging economies when users favor digital assets linked to the US dollar. This analysis presents the issues related to indexed tokens and possible developments in private digital currency. The BIS believes that these innovations require a suitable framework to evolve.
In brief
- The BIS believes that stablecoins do not yet fulfill all the functions of a real currency and have several structural limitations.
- The report warns of possible dollarization of emerging economies when households use stablecoins linked to the dollar as a store of value.
- The BIS highlights that over 99% of stablecoins remain pegged to the US dollar, dominated primarily by USDT and USDC.
- The institution believes that massive adoption of stablecoins could modify financial balances by increasing bank financing costs.
- The BIS offers an alternative based on regulated tokenization and a unified ledger linking public and private digital currencies.
The BIS questions the place of stablecoins in the monetary system
The Bank for International Settlements (BIS), in its 2026 Annual Economic Report, released on Sunday at its annual general meeting in Basel, Switzerland, that current stablecoins do not perform all the functions expected of a complete currency. The institution analyzes several essential criteria, such as uniqueness, elasticity, interoperability and integrity. According to its conclusions, existing models still present significant limits on these different aspects. This assessment places pegged tokens at the center of debates about the future of digital payments.
The BIS also explains that stablecoins can move away from their benchmark on secondary markets. In addition, their exchange mechanisms remain complex for daily use. THE report thus compares their operation to that of shares in exchange-traded funds rather than to a real currency. This analysis is consistent with the declarations of the Director General of the BIS on their financial nature.
However, the market remains limited in size compared to the traditional banking system. The BIS estimates that the total value of stablecoins reached around $320 billion at the end of May. Over 99% of these assets remain tied to the US dollar, with Tether's USDT and Circle's USDC dominating.
Digital dollarization worries BIS in emerging economies
The report highlights a phenomenon called dollarization of stablecoinswhere some households use dollar-pegged tokens as a store of value. This practice can modify capital movements and reduce the influence of national currencies. The BIS considers that this development represents a challenge for the monetary sovereignty of several emerging economies.
The authors also studied the economic consequences of massive adoption of stablecoins depending on the reserves held by their issuers. Their model indicates that a large expansion could weigh slightly on output in the medium term. The increase in bank financing costs and the reduction in credit would offset the benefits linked to the demand for public debt.
Even with very high capitalization, the report observes that the negative impact would remain limited in the scenarios studied. The BIS also recalls that these assets represent a significant part of illicit activities on certain blockchains. Transaction-related controls remain more difficult when users have stand-alone wallets.
Towards a new monetary architecture after the limits of digital tokens?
Faced with the difficulties identified, the BIS proposes a different approach based on coherent international rules. The goal is to integrate tokenization into the existing system of central banks and commercial banks. This orientation aims to preserve monetary stability while supporting digital innovations.
The bank notably presents the idea of a unified register bringing together several forms of tokenized money. This model would incorporate central bank reserves, commercial bank money and other regulated private assets. Central bank money would remain the point of reference in this architecture.
Furthermore, she also cited the Agora project as an experiment intended to test this approach. This cross-border payment prototype brings together several central banks and private institutions. According to the report, this initiative illustrates a possible evolution of global financial infrastructures.
In the short term, stablecoins will therefore continue to fuel discussions on digital monetary transformation and the evolution of the crypto industry. The progression of their use could strengthen the debates around dollarization and the rules necessary to regulate these new instruments.
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