On June 26, the Bank for International Settlements (BIS) released its annual report, asserting that stablecoins cannot be considered money. This position has stirred significant discussions within the crypto community.
Stablecoins and Their Status in the Financial System
Stablecoins, like USDT and USDC, play an important role in the crypto ecosystem, being used for cross-border transfers and in DeFi. However, BIS questions their status as mediums of exchange with the declaration: “Stablecoins are not money.”
Criteria Where Stablecoins Failed Testing
BIS defines three criteria for money status: singleness, elasticity, and integrity. Stablecoins do not meet these criteria: they do not provide uniform value and have limitations in elasticity, as well as insufficient compliance with norms and risk control standards.
Future of Stablecoins and Development of CBDCs
BIS emphasizes the advantages of tokenization based on central bank reserves and government obligations. While stablecoins may not represent an ideal form of money, BIS advocates for the development of Central Bank Digital Currencies (CBDCs) as a safer alternative.
Stablecoins might not be recognized as official money, but their use continues to grow, especially in high-inflation economies. They fulfill a vital role in financial inclusion, allowing individuals without access to traditional banking services to protect their assets and conduct quick transactions.
