BIS Chief Warns Stablecoins Risk Monetary Policy, Dollarization

BIS chief warns on stablecoin risks in Tokyo

Pablo Hernández de Cos, General Manager of the Bank for International Settlements (BIS), warned that stablecoins carry serious financial risks on 20 April 2026. He spoke at a Bank of Japan seminar in Tokyo. The BIS acts as a central bank for the world's central banks and sets global financial standards.

"On the other hand, stablecoins pose significant macroeconomic and financial challenges, including their potential effects on credit supply, financial stability and monetary and fiscal policy.", 20 April 2026. — Pablo Hernández de Cos, General Manager, Bank for International Settlements

Stablecoins are digital tokens pegged to fiat

Stablecoins are digital tokens designed to maintain a fixed value, usually pegged to the US dollar. De Cos identified five specific risk categories: effects on credit supply, financial stability, monetary policy, fiscal policy, and regulatory circumvention. He also flagged dollarization — the risk that citizens in smaller economies abandon their national currency for dollar-backed stablecoins.

Central bank money as anchor of trust

De Cos stated that central bank money "can serve as an anchor of trust, helping to mitigate the fragmentation and integrity risks that would arise in a purely decentralised monetary system." A decentralised monetary system is one where no single authority controls the currency supply.

US GENIUS Act set first federal stablecoin rules

The United States established its first federal regulatory framework for payment stablecoins in July 2025. President Donald Trump signed the GENIUS Act into law on 18 July 2025. The law covers reserve and compliance requirements for stablecoin issuers operating in the US market.