BIS Warns Dollar-Denominated Stablecoins Like USDT and USDC Pose Financial Stability Risk

Gate News message, April 21 — The Bank for International Payments (BIS) has reiterated concerns about stablecoins, with Managing Director Pablo Hernandez de Cos warning that dollar-denominated stablecoins such as USDT and USDC are fundamentally riskier than commonly perceived.

Cos stated that these stablecoins are structurally more similar to exchange-traded funds (ETFs) than to cash, positioning them as investment products rather than true payment instruments. The current design of dollar-indexed stablecoins does not meet requirements for safe payment methods and could pose a significant threat to financial stability if their adoption continues to grow.

The BIS director highlighted a critical vulnerability: stablecoin issuers' reserve assets consist primarily of short-term government bonds and bank deposits. In times of market stress, large-scale redemption demands could force issuers to rapidly liquidate these assets, potentially triggering broader financial instability. Cos emphasized that such forced asset sales could place additional pressure on banking sector financing conditions.

Cos concluded by stressing the necessity for global regulatory cooperation, noting that if dollar-indexed stablecoins expand to a scale where they compete with fiat currencies, the consequences could extend to both financial stability and global economic policy.