BIS Declares Stablecoins Are Not Money — What Signals Are Hidden Behind the Statement?

TradingKey – The Bank for International Settlements (BIS) has stirred debate by stating that stablecoins do not qualify as money, raising questions about whether this signals a bearish stance on the sector.

In its Annual Economic Report released Tuesday, June 24, the BIS concluded that stablecoins fail to meet the three core tests of money: singleness, elasticity, and integrity. According to BIS Economic Adviser Hyun Song Shin, stablecoins lack the universal acceptance and settlement function of central bank money, likening them to 19th-century private banknotes that traded at variable rates depending on the issuer.

That said, the BIS acknowledged stablecoins’ technical advantages, such as programmability, anonymity, low transaction costs, and speed. It also expressed strong support for tokenization, stating that a unified ledger built on tokenized central bank reserves, commercial bank money, and government bonds could form the foundation of the next-generation monetary system.

This dual stance — supporting tokenization while rejecting stablecoins as money — may seem contradictory. After all, stablecoins are essentially tokenized representations of fiat currencies like the U.S. dollar or euro. As regulatory clarity improves and more stablecoins are backed by transparent, high-quality reserves, the BIS may eventually be compelled to reassess their monetary classification.

Currently, stablecoins mirror fiat currencies in form but lack formal legal recognition. However, as jurisdictions like Hong Kong, the U.S., and South Korea move forward with stablecoin legislation, these digital assets could soon gain de facto legal currency status, reshaping how central banks and regulators define “money.”