A year after the Bank for International Settlements branded stablecoins “unsound money,” the BIS has returned with a more constructive follow up. Its latest report, “Anchoring trust in money: innovation beyond stablecoins,” pre-released today, still catalogs the shortcomings. The tone, however, has shifted from dismissal toward prescription.
Acting Head of Monetary and Economic Department Frank Smets outlined a two pronged approach during a media briefing. The first is coordinated action to address stablecoin weaknesses. The second is to advance an alternative path, integrating tokenized commercial and central bank money on interoperable platforms, with the BIS unified ledger concept and Project Agorá as reference points.
Last year the BIS framed its critique around three deficiencies: a lack of singleness, elasticity and financial integrity. This year’s report folds those into “financial integrity and moneyness” and adds two further challenges: governance on permissionless rails and fragmentation across competing blockchains. What the report does not do is fully assess how quickly private sector innovation and new regulation are already closing those gaps.
On integrity, programmable compliance controls unveiled last week by the US Hazel Network offer a working prototype. On singleness, the same network demonstrates a deposit-to-stablecoin transition that sidesteps the fragmentation problem. On elasticity, specific wording in the GENIUS Act may have quietly opened a door that Europe and the UK have explicitly shut. Taken together, these developments suggest constructive answers are already taking shape for many shortcomings the BIS identifies.
Article continues …
Want the full story? Pro subscribers get complete articles, exclusive industry analysis, and early access to legislative updates that keep you ahead of the competition. Join the professionals who are choosing deeper insights over surface level news.
