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# BIS Chief Says Stablecoins Are Not Credible for Payments at Scale
- URL: https://stablecoininsider.org/bis-jackson-hole-stablecoins-tokenised-deposits/
- Published: 2026-08-29T06:57:39.000Z
- Updated: 2026-08-29T06:57:39.000Z
- Description: BIS General Manager Pablo Hernández de Cos told Jackson Hole on August 28, 2026 that stablecoins in their current form are not a credible means of payment at scale, and that tokenised deposits should carry day-to-day payments.
- Author: Alexandra
- Tags: News, Institutions, Stablecoins

BIS General Manager Pablo Hernández de Cos told the Federal Reserve’s Jackson Hole Economic Policy Symposium on August 28, 2026 that stablecoins in their current form do not uphold the foundational properties of money and are not a credible means of payment at scale. He argued that tokenised deposits offer a more direct path while preserving the two-tier monetary system.

The speech, titled “Pushing the monetary frontier: stablecoins and tokenised deposits,” is published on the [BIS website](https://www.bis.org/speeches/sp260828.htm). [Reuters](https://www.reuters.com/business/finance/stablecoins-not-credible-means-payment-scale-bis-chief-says-2026-08-28/) summarised the same remarks from Wyoming.

### Key Takeaways

- **Stablecoins fail the BIS money test today** on singleness, interoperability, and integrity.
- **Tokenised deposits are the preferred rail** for day-to-day payments and wholesale settlement.
- **The two instruments can coexist**, with stablecoins limited to specialised roles under robust regimes.
- **Reserve composition drives macro effects**, through bank funding costs, T-bill demand, or drained central bank reserves.
- **Central banks should anchor singleness** on programmable rails and assess system-wide credit and stability risks.

## What Hernández de Cos Said at Jackson Hole

He opened with Wyoming’s Frontier Stable Token (FRNT) as symbolism for a state again testing the monetary frontier. The substance was a comparison of stablecoins and tokenised deposits against the foundations of money.

Those foundations, in his framing, are a common unit of account and the singleness of money — all instruments redeemable at par into central bank money with finality. Elasticity of liquidity, interoperability, and financial integrity sit around that core.

He stressed that money works because users do not have to verify each instrument at every payment. The two-tier system of central bank money and supervised private intermediaries still anchors that trust, even with frictions in interoperability and cross-border payments.

## Where Stablecoins Fall Short

On singleness, he used a USDT-to-USDC example. If Ben holds USDT and Marie only accepts USDC, Ben must sell and buy in secondary markets that routinely deviate from par, especially under stress, with no mechanism that enforces singleness.

Tokenised deposits, by contrast, are account-based bank liabilities on programmable platforms. Interbank settlement through central bank accounts preserves par redeemability into central bank money with finality.

On interoperability, most fiat-referenced stablecoins circulate as bearer-like instruments on public, permissionless chains that are fragmented across base networks and scaling layers. The “same” ticker on different chains is not fungible without bridges or other costly workarounds.

On integrity, self-custody and wallet-to-wallet transfers complicate AML/CFT enforcement. He noted that a majority of stablecoin balances sit in self-custodied wallets and that a rising share of transfers occurs outside KYC venues — the opposite of traditional money, where bank deposits dominate.

## Macro-Financial Channels

Reserve composition is the first-order macro lever. Wholesale bank deposits as reserves can raise banks’ marginal funding costs and tighten lending. Short-dated government bills can pull high-quality liquid assets from banks. Central bank reserves as backing can drain reserves from the banking sector.

In each case, banks’ liquidity metrics would likely weaken at first, then banks would reprice loans and tilt toward more liquid assets, with smaller banks and small-business lending more exposed. Model-based BIS scenarios point to a modest net output effect overall, shaped by reserve mix, public debt, and foreign demand.

Foreign demand for dollar stablecoins can add net demand for short-dated bills, lower short-term yields, and expand fiscal space. The same demand can raise digital dollarisation and monetary-sovereignty risks outside the United States — a theme we covered in our [**monetary sovereignty analysis**](https://stablecoininsider.org/stablecoins-and-monetary-sovereignty/).

[![Do Stablecoins Undermine Monetary Sovereignty?](https://storage.ghost.io/c/73/6a/736af0e4-2274-4543-a329-2952b2b52abc/content/images/2026/08/bis-card-monetary-sovereignty.png)](https://stablecoininsider.org/stablecoins-and-monetary-sovereignty/)

Reserve demand for T-bills also links directly to the Treasury complex we mapped in [**How Do Stablecoins Affect the US Treasury Market?**](https://stablecoininsider.org/stablecoins-and-the-us-treasury-market/).

[![How Do Stablecoins Affect the US Treasury Market?](https://storage.ghost.io/c/73/6a/736af0e4-2274-4543-a329-2952b2b52abc/content/images/2026/08/bis-card-treasury-market.png)](https://stablecoininsider.org/stablecoins-and-the-us-treasury-market/)

Run risk remains if issuers lack deposit-style backstops. Fire sales of bills or sudden deposit withdrawals can hit core money markets; issuers holding mostly central bank reserves could instead pull flows from banks during stress.

## Why Tokenised Deposits Look Preferable

Tokenised deposits stay inside the two-tier system and keep the link between deposit-taking and credit provision. That reduces disintermediation risk relative to a large shift into non-bank stablecoin liabilities.

He was clear that the market is not there yet. There are no multi-bank or inter-jurisdictional ecosystems issuing tokenised deposits in an interoperable framework; many live examples still look more like bank-issued stablecoins.

Scaling challenges include interoperability without walled gardens, governance and access rules, legal clarity on settlement finality and smart contracts, operational resilience, and a migration path that coexists with legacy systems. Public-private work such as Project Agorá is cited as early evidence of feasibility.

For a plain-language primer on the instrument itself, see our guide on [**what tokenized deposits are**](https://stablecoininsider.org/what-are-tokenized-deposits/).

[![What Are Tokenized Deposits?](https://storage.ghost.io/c/73/6a/736af0e4-2274-4543-a329-2952b2b52abc/content/images/2026/08/bis-card-tokenized-deposits.png)](https://stablecoininsider.org/what-are-tokenized-deposits/)

## Coexistence and Central Bank Priorities

Stablecoins and tokenised deposits could coexist if roles are delineated. Tokenised deposits should carry the bulk of day-to-day payments and wholesale settlement with settlement in central bank money.

Stablecoins may serve specialised roles — for example in decentralised lending — under transparent regimes that enforce par redemption for payment use, or else be treated as investment products with conduct and disclosure rules.

Central bank priorities in the speech are threefold: anchor singleness on programmable rails; promote interoperability and integrity, including cross-border supervisory cooperation; and take a system-wide view of credit supply, financial stability, and monetary transmission.

That institutional framing sits next to recent national moves such as the UK’s secondary objective for the Bank of England on digital settlement assets, covered in our [**Bank of England innovation-objective story**](https://stablecoininsider.org/bank-of-england-stablecoin-innovation-objective/).

[![Bank of England Gets a Legal Duty to Support Stablecoin Innovation](https://storage.ghost.io/c/73/6a/736af0e4-2274-4543-a329-2952b2b52abc/content/images/2026/08/bis-card-boe-innovation.png)](https://stablecoininsider.org/bank-of-england-stablecoin-innovation-objective/)

| Property             | Stablecoins (current form)                                     | Tokenised deposits                                                          |
| -------------------- | -------------------------------------------------------------- | --------------------------------------------------------------------------- |
| Singleness           | Secondary-market swaps (e.g. USDT→USDC) can break par          | Par settlement via central bank money in the background                     |
| Interoperability     | Fragmented public chains; bridges needed for same ticker       | Permissioned platforms; tokenised reserves improve fungibility across banks |
| Integrity            | Self-custody and wallet-to-wallet transfers complicate AML/CFT | Account-based, supervised environment                                       |
| Settlement           | Bearer-like tokens on public rails                             | Debit/credit of bank liabilities with CB settlement                         |
| Preferred role (BIS) | Specialised uses under robust regimes                          | Bulk day-to-day payments and wholesale settlement                           |

Par-redemption gaps and run dynamics are why reserve quality and depeg risk remain core diligence topics; see [**Are Stablecoins Safe?**](https://stablecoininsider.org/are-stablecoins-safe-risks-depegging-reserve-backing/).

[![Are Stablecoins Safe? Risks, Depegging & Reserve Backing Explained](https://storage.ghost.io/c/73/6a/736af0e4-2274-4543-a329-2952b2b52abc/content/images/2026/08/bis-card-are-stablecoins-safe.png)](https://stablecoininsider.org/are-stablecoins-safe-risks-depegging-reserve-backing/)

## Conclusion

Hernández de Cos did not ban stablecoins from the future monetary system. He said they do not yet meet the “no-questions-asked” standard of money at scale, and that tokenised deposits are the cleaner way to capture tokenisation gains without abandoning the two-tier architecture.

The speech leaves room for specialised stablecoin use under strong redemption and disclosure regimes. The policy ask for central banks is to keep singleness, interoperability, and integrity on programmable rails while watching credit and transmission effects.

Primary text: the [BIS speech of 28 August 2026](https://www.bis.org/speeches/sp260828.htm). Wire summary: [Reuters](https://www.reuters.com/business/finance/stablecoins-not-credible-means-payment-scale-bis-chief-says-2026-08-28/).

## FAQ

### 1\. What did the BIS chief say about stablecoins at Jackson Hole?

Pablo Hernández de Cos said that, in their current form, stablecoins do not uphold the foundational properties of money and are not a credible means of payment at scale. He preferred tokenised deposits for day-to-day payments while allowing specialised stablecoin roles under robust regimes.

### 2\. Why do stablecoins fail the “singleness” test in the speech?

Because converting between coins such as USDT and USDC often requires secondary-market trades that deviate from par, with no mechanism that enforces one-to-one redeemability into central bank money across instruments.

### 3\. What are tokenised deposits in this framing?

They are account-based bank liabilities recorded on programmable platforms, with interbank settlement through central bank accounts. That design is meant to preserve par settlement inside the two-tier monetary system.

### 4\. Can stablecoins and tokenised deposits coexist?

Yes. The speech sketches coexistence in which tokenised deposits handle bulk day-to-day payments and wholesale settlement, while stablecoins serve specialised roles under transparent par-redemption regimes or as investment products.

### 5\. What macro risks did he flag?

Reserve composition can raise bank funding costs, tighten lending, reduce HQLA, or drain central bank reserves. Foreign demand for dollar stablecoins can expand fiscal space via T-bill demand but also risks digital dollarisation outside the US.

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