BIS Warns Stablecoins Exceeding $250B Could Drain Bank Deposits

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According to its 2026 Annual Economic Report, the Bank for International Settlements warned that the rapid growth of stablecoins could begin pulling deposits away from commercial banks, potentially increasing funding costs and reducing lending capacity. The BIS noted that while tokenization could modernize financial markets, privately issued stablecoins could weaken the traditional banking model if widely used for payments and savings. Global stablecoin circulation has exceeded $250 billion, with major issuers like Tether and Circle becoming among the largest holders of short-term U.S. Treasury securities. The report distinguished stablecoins from cryptocurrencies like Bitcoin, arguing they increasingly perform functions traditionally carried out by bank deposits—transferring money, settling trades, and serving as stores of value—making them a different regulatory challenge than speculative assets.
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