Meanwhile, the Bank for International Settlements (BIS) noted in its annual report that stablecoins lack the final settlement function provided by central banks. Their value may fluctuate across issuers, undermining monetary uniformity. Additionally, the “stability” they promise conflicts with the risks inherent in their profit models, potentially triggering financial stability risks like asset sell-offs and threatening emerging economies’ monetary sovereignty and capital controls.

Combining the two institutions’ views, stablecoins have multiple systemic flaws. They are unlikely to become a pillar of the future monetary system and pose threats to global financial stability and security.