The BIS Says Stablecoins Are Not Ready for Everyday…

BIS General Manager Pablo Hernandez de Cos delivered the warning at the Jackson Hole Economic Symposium on 28 August, arguing that tokenized bank deposits offer a safer path to digital payments than private stablecoins.

Three Gaps the BIS Identifies in Stablecoins

De Cos named three sets of questions about stablecoins, with each addressing issues that bear directly on everyday payment use. First, stablecoins lack a reliable mechanism for par redemption into central bank money. Secondary market sales may not preserve par value, meaning a dollar-pegged coin could trade below a dollar precisely when a user needs to spend it.De Cos said "notable gaps would need to be closed to approach the 'no-questions-asked' standard of money," PYMNTS reported. Second, cross-chain transfers require expensive or risky workarounds. A user moving USDC from Ethereum to Solana does not execute a simple transfer but relies on bridges or sells and repurchases, which introduces slippage and counterparty risk. Third, self-custodied wallet holdings complicate anti-money-laundering enforcement. Without an intermediary, AML/CFT compliance becomes difficult to apply consistently, according to the BIS chief's Jackson Hole remarks.The bank-funding concern instead appears in the speech's discussion of macro-financial implications. If consumers shift deposits from banks to stablecoins at scale, lending institutions lose affordable funding, which could raise borrowing costs for households and businesses.Global stablecoin supply stood at $308 billion as of August 2026, about 13% higher than a year earlier, with Tether holding roughly 60% market share.

Adoption Numbers That Complicate the BIS Case

De Cos's warning goes against a month of data showing stablecoins moving into precisely the everyday transactions he says they cannot handle. Stablecoins accounted for 84% of tracked card spending in July 2026, across nearly 9 million transactions worth $759 million. The top three card providers processed $585 million of that total.Farooq Malik, CEO of stablecoin payments firm Rain, told The Block that "stablecoin payments facilitated by the firm are already reaching more than 100,000 merchants without them knowing it," in a 19 August interview. Rain's annualised transaction volume exceeded $3 billion as of May 2026. Malik noted that merchants could potentially settle stablecoin transactions same-day rather than waiting the standard three days through Visa's network.

Visa's Stablecoin Gap Underlines the Infrastructure Race

The infrastructure behind these payments is itself in flux. Visa is reported to be seeking a new stablecoin settlement partner after Mastercard acquired BVNK, its previous settlement provider, CoinDesk reported on 18 August. That both card networks are actively building stablecoin rails suggests the industry is not waiting for the BIS's concerns to be resolved before scaling.

Central Banks, Not Issuers, Are the Real Audience

De Cos's preferred alternative is tokenized bank deposits: tokenised deposits "are account-based bank liabilities recorded on a programmable platform", with "interbank settlement through central bank accounts in the background." The distinction matters because the BIS does not regulate stablecoin issuers, and it advises central banks.The Jackson Hole speech is aimed at monetary authorities considering how to regulate private stablecoins, not at Circle or Tether. De Cos also flagged "digital dollarisation" risk: widespread adoption of dollar-pegged stablecoins could undermine monetary sovereignty in non-US jurisdictions. US Treasury Secretary Scott Bessent has argued the opposite, contending that stablecoins strengthen the dollar internationally and increase Treasury demand. That disagreement between the central bankers' bank and the US Treasury frames the regulatory debate heading into the autumn legislative session. The BIS's three payment objections are technically valid. Interoperability is poor, AML enforcement is inconsistent, and par redemption is not guaranteed. But the objections describe the protocol layer, not the user layer. Crypto card providers have already abstracted those problems behind Visa and Mastercard rails, delivering stablecoin-funded transactions to merchants who process them as ordinary card payments. Whether the BIS's framework catches up to that reality, or whether regulators use it to slow adoption, depends on which governments prioritise the speech's conclusions over the payment data accumulating in real time.