Stablecoins fail to pass the three fundamental tests, according to the 2025 BIS report.
On June 24, the Bank for International Settlements (BIS) released a report stating that stablecoins do not meet the essential requirements to serve as the backbone of the global financial system. The organization claims stablecoins fall short in three key areas: elasticity, singleness, and integrity.
According to the authors, the first issue is elasticity: stablecoins like Tether’s USDT require full pre-funding for each new issuance, creating liquidity constraints that limit their monetary functionality, the BIS states.
The second obstacle concerns monetary singleness. Unlike central bank reserves, stablecoins are issued by centralized entities with varying standards, causing exchange rate discrepancies and undermining universal acceptance, the report suggests.
The analysis also highlights concerns regarding the integrity of the monetary system. The report’s authors warn that stablecoins could facilitate criminal activities and erode national monetary sovereignty through processes of “hidden dollarization.”
While acknowledging some benefits such as programmability and potentially lower transaction costs, the BIS maintains a critical stance on adopting stablecoins as substitutes for traditional money.
Paradoxically, while the report criticizes stablecoins, the organization expresses optimism toward the tokenization of traditional assets. The BIS sees transformative potential in tokenizing central bank reserves, commercial bank money, and government securities.
The authors conclude that although stablecoins may continue to serve as a bridge to the crypto ecosystem and in countries with high inflation, they should not be treated as equivalent to cash.
