BIS chief says stablecoins can't yet handle payments at scale
DeFi & Yields ·
Pablo Hernández de Cos told the Jackson Hole symposium that tokenized deposits, not stablecoins, should carry the bulk of everyday transactions.
Speaking at the Jackson Hole Economic Policy Symposium, Bank for International Settlements General Manager Pablo Hernández de Cos said stablecoins have not reached a level of credibility needed to function as a mainstream payment tool, according to reporting cited by wublockchain.xyz. He argued that tokenized deposits present a stronger path for applying tokenization to the financial system, and suggested the two instruments could operate side by side — with tokenized deposits absorbing most routine payment activity while stablecoins are reserved for narrower use cases.
De Cos acknowledged a potential upside: stablecoins could push down government borrowing costs by boosting demand for U.S. Treasuries. But he warned of a countervailing risk, noting that if deposits shift out of banks and into stablecoins, banks could face higher funding costs, which in turn could push up borrowing costs for everyday customers. His remarks, also detailed by cointelegraph.com, flagged additional operational gaps — limited interoperability between platforms and inconsistent enforcement of anti-money-laundering safeguards across jurisdictions.
A broader concern raised was sovereignty-related: as dollar-pegged stablecoins gain traction in certain countries, De Cos said this trend could erode monetary sovereignty and blunt the effectiveness of domestic monetary policy in those places. That framing positions stablecoin growth not just as a financial-stability question but as a governance issue for central banks trying to retain control over local monetary conditions.
At the same time, De Cos was careful to note that tokenized deposits are not free of obstacles. He said they, too, must clear hurdles around interoperability across systems, governance frameworks, and unresolved legal questions before they can be scaled reliably. The same set of concerns — interoperability and governance friction — was echoed in coverage from leviathan.news, which characterized the remarks as a direct challenge to claims that stablecoins are ready for large-scale settlement use.
What remains unclear is how regulators or central banks might act on these concerns — whether through new rules targeting stablecoin interoperability and AML enforcement, or through active promotion of tokenized-deposit infrastructure as an alternative. De Cos did not lay out a specific policy timeline or enforcement mechanism, leaving open whether his comments signal an eventual BIS-led push for standards, or simply an observation meant to shape the ongoing debate among central banks and market participants about how tokenization should be built into payment systems going forward.