Analysts at the Bank for International Settlements (BIS) warned that the widespread adoption of stablecoins could create new macro-financial risks, even as tokenization has the potential to improve payment efficiency.
BIS published its 2026 Annual Economic Report, arguing that stablecoins don’t meet the core properties of money and require structural shortcomings to be addressed. The report said the future development of digital financial infrastructure shouldn’t replace the existing monetary system. Instead, it should integrate tokenization technologies into the existing two-tier model built on central bank money and commercial bank money.
According to BIS, digital innovation can enhance competition and improve the efficiency of payment systems. However, the stablecoin market remains fragmented. Today’s stablecoins largely rely on public blockchain networks, creating challenges related to interoperability, scalability, and financial integrity. In addition, the use of unhosted wallets without user identification procedures increases risks associated with illicit financial activity.
BIS also said widespread stablecoin adoption could affect bank lending, financial stability, monetary policy transmission, and public finances. The report highlighted several key risks:
- higher and less stable bank funding costs;
- reduced lending to the real economy;
- weaker monetary policy transmission;
- increased dollarization in economically vulnerable countries.
At the same time, BIS noted that stronger demand for government bonds from stablecoin issuers could lower sovereign borrowing costs. The scale of these effects will depend on the level of stablecoin adoption, the composition of reserve assets, and regulatory frameworks.
As priorities for policymakers, BIS recommended focusing on:
- addressing shortcomings in existing stablecoin issuance and circulation mechanisms;
- reducing the risk of large-scale redemptions;
- strengthening financial integrity safeguards and compliance with KYC/AML requirements;
- integrating tokenization technologies into the existing two-tier monetary system.
The report cited Project Agorá as an example of this approach. The initiative focuses on developing a programmable platform for cross-border payments using tokenized bank reserves and deposits. The project launched in April 2024 and, by 2026, brought together 8 central banks and more than 40 leading private sector financial institutions.
