The comments come alongside a new study from the BIS-linked Financial Stability Institute (FSI) that highlights significant differences in how major jurisdictions regulate stablecoin issuers.
BIS Questions Stablecoins as Everyday Money
According to de Cos, stablecoins face several structural challenges that could prevent them from becoming widely used payment instruments.
He pointed to issues including limited interoperability between stablecoin platforms and difficulties applying anti-money-laundering controls consistently across different systems.
The BIS has also raised concerns about the growing use of U.S. dollar-pegged stablecoins outside the United States.
A wider shift toward dollar-based digital tokens could potentially influence monetary sovereignty in other countries and complicate the ability of central banks to conduct domestic monetary policy.
De Cos instead argued that tokenized deposits could provide many of the benefits of blockchain-based money while remaining closer to the traditional banking system.
Stablecoins Could Also Affect Bank Funding
The BIS chief acknowledged that stablecoins could potentially reduce government borrowing costs by increasing demand for tokenized or digital representations of government debt.
However, he warned that the impact on consumers could be less straightforward.
If customers move large amounts of money from traditional bank deposits into stablecoins, banks could lose an important source of low-cost funding.
Banks could respond by increasing the rates they pay to attract deposits or passing higher funding costs through to borrowers.
That could ultimately increase borrowing costs for households and businesses.
Global Stablecoin Rules Remain Fragmented
The debate comes as regulators around the world take different approaches to stablecoin issuers.
A new Financial Stability Institute study compared regulatory frameworks across the United States, European Union, United Kingdom, Hong Kong and Singapore. (BIS)
The research found significant differences in which entities can issue stablecoins and which additional activities those issuers are permitted to conduct.
These differences could become increasingly important as stablecoins expand beyond crypto trading into payments, remittances and financial applications.
United States Takes a More Restrictive Approach
The United States and Singapore generally apply more restrictive rules to non-bank stablecoin issuers.
Under the U.S. GENIUS Act, payment stablecoin issuers face restrictions around activities such as lending, staking, proprietary trading and custody of third-party crypto assets.
The objective is to separate stablecoin issuance from higher-risk financial activities and ensure that payment-focused tokens maintain sufficient backing and operational safeguards.
For the cryptocurrency industry, this could create a clearer distinction between stablecoins designed primarily for payments and other crypto products offering yield or investment exposure.
Europe and Asia Take Different Approaches
The regulatory picture is different in other major markets.
The European Union, United Kingdom and Hong Kong generally allow certain additional activities under specific conditions, including separate authorization, regulatory approval or other applicable permissions.
This creates a more diverse global regulatory environment.
For stablecoin companies operating internationally, the differences mean that a product permitted in one jurisdiction may face substantially different requirements elsewhere.
Stablecoin Issuer Rules Can Differ From Parent Companies
The FSI research also highlighted an important structural distinction.
Restrictions generally apply to the specific entity issuing the stablecoin, rather than automatically applying to its entire corporate group.
That means another company within the same group could potentially conduct activities that the regulated stablecoin issuer itself cannot.
This distinction could become increasingly relevant as major financial and technology companies build multiple businesses around stablecoins, payments and digital assets.
What This Means for Bitcoin
The BIS criticism is primarily focused on stablecoins rather than Bitcoin itself.
However, the debate matters for the broader Bitcoin ecosystem because stablecoins have become an important part of cryptocurrency markets.
Stablecoins are widely used for trading, liquidity management, transfers and settlement across digital-asset platforms.
Stricter stablecoin regulation could therefore influence:
Crypto exchange liquidity
Bitcoin trading pairs
Institutional digital-asset markets
Cross-border payments
DeFi activity
Onchain settlement
Demand for dollar-denominated digital assets
If regulators impose stricter requirements, compliant stablecoins could potentially gain an advantage over less-regulated alternatives.
Tokenized Deposits Could Become a Competitor
The BIS argument also points toward a broader competition between stablecoins and tokenized bank deposits.
Tokenized deposits essentially represent traditional bank money using blockchain infrastructure.
Unlike privately issued stablecoins, tokenized deposits remain closely connected to the banking system and existing deposit relationships.
If banks can successfully tokenize deposits while providing faster settlement and programmable payments, they could compete directly with stablecoins for institutional and commercial payment use cases.
That could become one of the most important developments in the next phase of blockchain-based finance.
Regulation Will Shape the Next Stablecoin Cycle
Stablecoins have moved from a niche cryptocurrency product toward a potential component of global payments infrastructure.
That growth is attracting greater attention from central banks and financial regulators.
The key question is no longer simply whether stablecoins can function technically.
Instead, regulators are increasingly asking whether stablecoins can operate safely at scale while preserving financial stability, monetary sovereignty, consumer protection and effective anti-money-laundering controls.
The answers will likely determine how far stablecoins can expand beyond cryptocurrency markets.
Bottom Line
The BIS is once again challenging the idea that stablecoins can become a credible form of money for large-scale payments.
Pablo Hernández de Cos argues that tokenized bank deposits could offer a more direct way to bring blockchain technology into the financial system without weakening the foundations of traditional banking.
At the same time, new FSI research shows that stablecoin regulation remains highly fragmented across major global markets.
For Bitcoin and the wider crypto industry, the outcome matters because stablecoins provide critical liquidity and settlement infrastructure across digital-asset markets.
As regulators move toward stricter and more detailed frameworks, the future of stablecoins could increasingly depend on their ability to combine blockchain efficiency with the safeguards expected of traditional financial institutions.
