Pablo Hernández de Cos, general manager of the Bank for International Settlements, said stablecoins lack credibility for large-scale payments and endorsed tokenised bank deposits as the preferred alternative at Jackson Hole on August 28.
The BIS, which serves as a coordinator for central banks and conducts monetary policy research, has become a focal point for institutional debate over which blockchain-based instruments should underpin digital payments infrastructure. Hernández de Cos's statement at the economic conference marks an explicit institutional preference for deposits issued by regulated banks over decentralised stablecoin systems, a position that carries weight in central bank policy discussions across G10 jurisdictions.
Stablecoins have grown to over 150 billion dollars in circulating supply as of mid-2026, with USDT and USDC accounting for the majority. The asset class emerged to solve friction in crypto markets but has faced sustained criticism from regulators over reserve transparency, redemption guarantees, and the absence of deposit insurance frameworks. The Federal Reserve and European Central Bank have both flagged stablecoins as posing risks to financial stability if adoption accelerated without binding regulation.
Tokenised bank deposits are issued by commercial banks and backed one-to-one by reserves held at a central bank, giving the instrument a direct claim on fiat currency. Switzerland's UBS and BNY Mellon have each launched tokenised deposit platforms in 2024 and 2025. The BIS itself operates the BIS Innovation Hub, which has tested tokenised settlement systems with multiple central banks, including a cross-border trial in 2024 that used tokenised Swiss francs.
Hernández de Cos did not announce new BIS initiatives in the statement but reframed the institutional consensus around payment tokenisation. The BIS has published research since 2022 warning that stablecoins without central bank backing could fragment payment systems and create contagion risk during market stress. Tokenised deposits embed the central bank guarantee within the token itself, eliminating the credit risk that stablecoins ask users to accept from private issuers.
The BIS general manager's remarks come as the Bank of England and European Central Bank are advancing proposals for retail central bank digital currencies, and as international bodies including the Financial Stability Board continue drafting stablecoin regulation. The US has not yet passed legislation on stablecoins, though the SEC and CFTC have moved to assert jurisdiction over certain token issuers.
Hernández de Cos's endorsement of tokenised deposits over stablecoins aligns with BIS opposition to private stablecoins without deposit-like backing since at least 2021. The difference now is explicit public rejection of stablecoins at scale, spoken by the BIS's highest ranking official at a venue read by central bank governors. Tokenised deposits have moved from theoretical to operational; stablecoins remain unregulated in most jurisdictions and their role in institutional payment flows remains contested.
The document to watch is the Financial Stability Board's updated framework for stablecoin regulation, expected in the fourth quarter of 2026, which will determine whether stablecoins face material restrictions on reserve composition or redemption that would functionally mirror tokenised deposit requirements.
