The Central Banks' Bank Backs Tokenised Deposits Over Stablecoins

BIS chief questions stablecoins as a payment tool at scale

The Bank for International Settlements (BIS), an umbrella body for central banks, said stablecoins are not a credible means of payment at scale. General Manager Pablo Hernández de Cos made the argument at the Federal Reserve's Jackson Hole Economic Policy Symposium in Wyoming on 28 August 2026. He said tokenised deposits offer a more compelling way to bring blockchain benefits into finance. De Cos, seen as a candidate to succeed European Central Bank President Christine Lagarde, said the two instruments could coexist.

De Cos says stablecoins break the singleness of money

Stablecoins break the singleness of money, de Cos said, because holders cannot move between products without selling one and buying another at a cost. He gave a simple example. A person holding Tether (USDT) cannot pay someone who accepts only USD Coin (USDC). The sender must first trade at a secondary-market price that may not match par. "There is no mechanism that enforces singleness," de Cos said. He added that stablecoin platforms are not interoperable across networks and raise money-laundering questions, since controls are hard to apply consistently on public blockchains.

Dollar stablecoins raise monetary sovereignty concerns

De Cos warned that heavy use of dollar-pegged stablecoins outside the United States could erode monetary sovereignty. If ordinary borrowers move into dollar-based tokens, local conditions could tie more closely to external policy, he said. U.S. Treasury Secretary Scott Bessent has backed stablecoins. He says they could reinforce the dollar's reserve role and raise demand for Treasuries. De Cos accepted that stablecoins could lower sovereign borrowing costs, as Bessent argued, but said the trade-offs elsewhere were real.

De Cos flags risks to bank funding and stability

As deposits shift into stablecoins, bank funding costs could rise and ordinary borrowers may pay higher rates, de Cos said. He said wider adoption could push lending toward non-bank firms and make credit more procyclical. He also flagged run risk. If holders rush to redeem, issuers may be forced into fire sales that strain money markets.

Tokenised deposits offer a more direct path, de Cos says

Tokenised deposits are account-based bank liabilities settled in central bank money, de Cos said. That structure preserves par redemption and settlement finality. He said tokenised deposits should carry the bulk of day-to-day payments and wholesale settlement. Stablecoins, he said, should serve narrow roles such as decentralised lending pools under strict rules that enforce redemption at par.

"Tokenised deposits offer a more direct path to harness tokenisation while preserving the monetary system's foundations", 28 August 2026. — Pablo Hernández de Cos, General Manager, Bank for International Settlements

De Cos cautioned that tokenised deposits are not a finished product. They still face interoperability, governance and legal hurdles, including questions over settlement. No multi-bank, cross-border system issues them at scale yet, he said.

Tether's size shows the scale behind the debate

The debate follows fast growth in stablecoins. Tether (USDT), the largest stablecoin, held a market value near $183 billion (CoinPaprika, 29 August 2026). That size has drawn scrutiny from officials concerned about financial stability. De Cos pointed to work such as Project Agorá, where central banks and private firms test cross-border settlement of tokenised deposits against central bank money. He said the two instruments can coexist only if their roles stay separated and safeguards are in place.

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