BIS Chief Critiques Stablecoins, Advocates for Tokenized Deposits
- Pablo Hernández de Cos highlighted four shortcomings of stablecoins during his Jackson Hole address.
- Global stablecoin supply has reached $308 billion this month, marking a more than 14% increase year over year.
- De Cos urged central banks to focus on tokenized deposits, which preserve the “singleness” of money better than stablecoins.
- Key issues with stablecoins include lack of par redeemability, elasticity, interoperability, and financial integrity.
- Bitcoin‘s price dipped below $80,000 following Federal Reserve Chair Kevin Warsh’s hawkish inflation stance at the same event.
De Cos’s remarks at Jackson Hole emphasized the limitations of stablecoins in serving as credible money at scale and suggested that central banks should prioritize tokenized deposits instead. The growing global supply of stablecoins and their increasing role in digital payments raise concerns about monetary sovereignty and digital dollarization.
The speech highlighted that despite the advantages of faster settlement and lower fees offered by stablecoins, their structural limitations make them unsuitable for large-scale adoption without compromising monetary integrity standards. (Source)
