Are Stablecoins Really Not “Money”? The BIS Just Poured a Bucket of Cold Water
On June 25, the Bank for International Settlements (BIS) released its annual report — and it sent shockwaves through the crypto community. This institution, often called the “central bank of central banks,” stated bluntly:“Stablecoins are not money.”
This declaration left many crypto users stunned. After all, stablecoins are the backbone of the crypto ecosystem: used for cross-border transfers, DeFi collateral, CEX deposits and withdrawals, and even by governments and institutions worldwide. So when one of the world’s most influential financial authorities says they don’t even qualify as “money,” you have to ask: What just happened?
Today, let’s break down exactly what the BIS said, why it denied stablecoins’ monetary status, and what this means for the entire crypto industry.
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The BIS’s “Three Tests”: Stablecoins Failed Every One
The BIS report’s core logic is this: If an asset wants to qualify as “money” in the modern financial system, it must pass three critical tests:
Singleness
Elasticity
Integrity
Stablecoins? They failed across the board.
- Stablecoins Undermine “Singleness”
The BIS points out that Singleness means: No matter which bank you hold your account in, or whose digital money you use, everything should be 1:1 redeemable, universally accepted, with a consistent settlement experience.
Stablecoins aren’t like this. For example, USDT and USDC are issued by private companies. Though everyone calls them “dollar stablecoins,” look closely at their contract addresses, audit reports, and redemption mechanisms — they are all fundamentally different.
The BIS even likens this to 19th-century U.S. free banking: Back then, every bank issued its own notes. People carried various bills with different denominations and logos, but the redemption rates and creditworthiness varied wildly, creating chaos in the financial system.
In their view, stablecoins are repeating history: They look like “$1,” but in reality, they are multiple shadows of the dollar, not a single unified currency.
- Stablecoins Lack “Elasticity”
The second criterion, Elasticity, asks: When the demand for money rises, can the issuance system expand flexibly to meet it?Stablecoins do the opposite.
Take Tether’s USDT as an example: Its issuance model is: you must prepay dollars, and then they mint an equivalent amount of USDT. This “prepaid minting” model has none of the proactive, anticipatory expansion capacity of central bank money.
Need more liquidity? Sorry — stablecoins can’t do that.
According to the BIS, this passive issuance model means that during crises or extreme volatility, the market is prone to “running out of money” — what we often call liquidity crunches. It’s like having a water pipe that only flows if users bring their own buckets to pour water into it — good luck keeping up with demand.
- Stablecoins Have “Integrity” Deficiencies
Integrity refers to compliance: AML, KYC, and systemic risk controls.While stablecoins are on-chain assets, many issuers have varying degrees of regulatory cooperation. Some stablecoins don’t have complete AML/KYC processes in certain jurisdictions and even permit anonymous transfers.
From a central bank perspective, that’s a minefield.And if a hack, custodian default, or lack of asset transparency occurs, holders are directly exposed — unlike the traditional banking system, which has mechanisms like deposit insurance to cover losses.
The BIS: Stablecoins’ Advantages Are Not “Stable” Enough
To be clear, the BIS doesn’t entirely dismiss stablecoins. It acknowledges several benefits:
Fast cross-border payments, especially where traditional remittance is expensive and slow
Strong programmability for integration into smart contracts and automated settlements
Low entry barriers, enabling people without USD accounts to access crypto markets
But in the BIS’s eyes, these are more like “tool attributes,” not “money attributes.” Stablecoins are “financial gadgets,” not “real money.”Even more critically, the BIS emphasizes the risk of “hidden dollarization,” essentially warning developing countries:Don’t depend too much on these crypto-dollar substitutes, or your sovereign currency will lose relevance.
What Do Central Banks Really Want? The BIS Is Actually Selling CBDCs
You might think the BIS is just throwing cold water on crypto. But look deeper — it’s actually undermining a competitor.In the same report, while the BIS criticizes stablecoins, it praises the tokenized future — especially tokenization built around central bank reserves, commercial bank money, and government bonds. The BIS explicitly says:“Tokenization could lay a strong foundation for the next generation of money and financial systems.”
Translated:Stablecoins aren’t qualified — central bank digital currencies (CBDCs) are the official answer.
Want cross-border payments? The central bank will build direct settlement networks.
Want smart contracts? The central bank will issue programmable money.
Want data privacy? The central bank will provide privacy-protecting sandboxes.
Want stability? Central bank guarantees — nothing is safer.
In essence, this report isn’t just dismissing stablecoins — it’s paving the way for global CBDC projects. You could see it as a technocratic product pitch:“Stablecoins, please step aside — our turn now.”
How Should the Crypto Industry Interpret This?
This BIS report feels like an official declaration:Stablecoins are not money — but they are useful financial tools for the moment.
This shouldn’t surprise anyone. From day one, stablecoins have operated in regulatory gray zones with an ambiguous status.But that doesn’t mean they’ll be banned overnight. On the contrary — in many countries, especially those with high inflation and chronic dollar shortages, stablecoins are a necessity for ordinary people to protect their wealth.Just look at Argentina, Turkey, Nigeria, Vietnam — where USDT circulation and trading volumes are staggering. For many people there, USDT is more stable than their own currency.
So the crypto industry should see it this way:
Short term: Stablecoins remain the lifeblood of on-chain finance. The BIS report is more about future policy direction.
Medium to long term: Expect stricter regulation, especially in KYC, custody, and disclosures.
Endgame: We may witness a transition period where stablecoins evolve into compliant CBDC hybrids — eventually cooperating with central banks rather than competing with them.
Conclusion
From a monetary theory perspective, the BIS judgment is logical.
But from a financial services angle, stablecoins have solved many real problems:
They enable the unbanked to participate in the global economy.
They make cross-border payments happen in minutes.
They provide people in high-inflation countries with a practical hedge.
Stablecoins may not become the future backbone of the monetary system, but in a world of uneven financial access, costly banking, and slow payments, they play a vital role as a bridge.
The BIS can refuse to recognize them as “money.” But it cannot deny this fact:Stablecoins are the closest thing to financial inclusion that crypto has ever created.And that’s why — even if they’re not officially “welcome” — hundreds of millions of people will keep using them.
