Bank for International Settlements: Stablecoins do not meet the standards of real currency

The bank for international settlements recently released a report stating that stablecoins have failed to pass three key tests required to become a pillar of the monetary system: uniqueness, resilience, and integrity. The institution believes that the role of stablecoins in the future monetary system remains unclear, but they currently cannot become its pillar.

The report acknowledges that stablecoins have certain advantages, such as programmability, pseudonymity, and user-friendly access. In areas like cross-border payments, they may offer lower costs and faster transaction speeds. However, compared to traditional currencies, stablecoins could pose risks to the global financial system by undermining government monetary sovereignty and facilitating criminal activities.

Specifically, stablecoins perform poorly in elasticity tests. Taking USDT as an example, its issuance requires full prepayment, which imposes a "prepaid cash constraint." In terms of uniqueness, stablecoins are generally issued by centralized entities that may set different standards and do not necessarily provide the same settlement guarantees. This leads to stablecoins potentially trading at different exchange rates, undermining the uniqueness of the currency.

Stablecoins also have significant flaws in promoting the integrity of the monetary system. Not all issuers adhere to standardized KYC and AML guidelines, making it difficult to effectively prevent financial crimes.

Despite concerns over stablecoins, the Bank for International Settlements remains optimistic about the potential of tokenization. The report points out that tokenization platforms centered around central bank reserves, commercial bank money, and government bonds could lay the groundwork for the next generation of currency and financial systems. This innovation is expected to bring revolutionary changes in areas such as cross-border payments and the securities market.

Although stablecoins play an important role in the crypto ecosystem and are becoming increasingly popular in certain specific economic environments, the bank for international settlements believes that these assets should not be treated as cash. With the continuous development of financial technology, regulators and market participants need to continue to pay attention to the evolution of stablecoins and their potential impact on the global financial system.