Stablecoins Fail Key Tests of Real Money

The new report of banks for International Settlements (BIS) has questioned the idea that stablecoins can serve as money in a modern financial system.

According to For the annual BIS 2025 economic report, stablecoins fail basic tests “Singleness”, “Elasticity” and “Integrity”, three critical criteria that define effective currency tools.

BIS has described Stablecoins as “digital bearers’ tools that resemble financial assets more than real money. “Stablecoins work badly when they are assessed against these three tests that serve as a money system,” the report said.

Unlike the money supported by the central bank that is accepted “on par” and do not require any background checks, Private entities release Stablecoins And often trades in turnover rates. This is undermined by the basic principle of cash singleness, the report said.

Related: South Korea’s central bank wants to gradual introduction of stablecoin

Stablecoins fail elasticity and integrity tests

Elasticity, the second test, is essential for the absorption of shocks and meet the requirements for payment with a high value, BIS said in its report.

He pointed out that “any additional offer of stablecoins so requires full payment payments to his holder”, which compares to “strictly set up cash”, which contrasts with the flexibility of modern banking systems where central banks provide liquidity as needed.

The third and perhaps the most damning failure is the integrity area. The report claimed that the Stablecoins proposal, especially those that have been manifested through an embarrassment Wallets on public blockchainsmakes them susceptible to financial crime.

“Stablecoins have significant shortcomings in support of the integrity of the monetary system,” BIS said, emphasizing their vulnerability of money washing, sanction leaks and terrorist financing.

Related: Malaysia launches digital assets to test stablecoin, programmable money

Stablecoins should have a limited role

In recognition of the ongoing demand for stablecoins due to Functions such as cross -border availability And lower transaction costs, BIS claimed that they should only play a limited and well -regulated role.

“Society can again learn historical lessons to limit unhealthy money,” the report warned. “The courageous central banks and other public bodies can move the financial system along the right way in cooperation with the financial sector.”

Circle, company for USDC (USDC), saw a decline in his shares on Tuesday after the BIS report by more than 15% and reached $ 222. CRCL shares had has reached a historic maximum on Monday $ 299.

Despite its hard takeover of Stablecoins, the BIS report appreciated the tokenization as a “transformation innovation” for the new generation financial and financial system. It is reported that tokenization is based on the current financial system rather than replacing it.

Some in the crypt community said It is not a “surprise” that BIS paper was generally negative on stablecoins, given that it is a “regulatory body owned by global central banks”.

“BIS is hysterical in its opposition to crypto,” Jim Walker, chief economist of Aletheia Capital, he wrote. “The first criterion supported by the Central Bank should make it laugh due to the historical failures of these institutions around the world.”