The Bank for International Settlements (BIS) has reiterated the need for global regulation of “stablecoins”. According to the organization, these assets resemble investment instruments more than payment methods, reports Reuters.
BIS General Manager Pablo Hernández de Cos highlighted the high market concentration. USDT and USDC account for about 85% of the total issuance, which has exceeded $300 billion. Due to redemption issues and frequent deviations from the nominal rate, de Cos compared stablecoins to exchange-traded funds.
The head of the organization warned that fiat-pegged assets could weaken monetary policy and trigger stress in financial markets. Differences in regulations across countries create risks of regulatory arbitrage.
De Cos also reminded of the danger of mass withdrawals. He stated that risks would be reduced if issuers gained access to deposit insurance schemes or central bank credit lines. He supported a ban on paying interest on stablecoins to prevent capital outflows from bank deposits.
Meanwhile, the use of stablecoins in the real sector is growing. According to a joint study by BVNK, Coinbase, and Artemis, these assets are increasingly used for payments, salaries, and savings.
Earlier in April, Chainalysis analysts suggested that the volume of stablecoin transactions could reach $1.5 quadrillion by 2035.