WASHINGTON — Stablecoins are facing renewed scrutiny from international banking officials as policymakers debate whether privately issued digital currencies can become a major part of everyday payments.
Pablo Hernández de Cos, general manager of the Bank for International Settlements, said stablecoins do not currently provide a credible foundation for payments at scale and argued that tokenized bank deposits may offer a more practical model.
The Stablecoin Debate Moves Beyond Crypto Markets
Stablecoins were initially developed as a way to maintain a relatively stable digital value.
They have since become important infrastructure for cryptocurrency trading.
Supporters increasingly want them to move beyond crypto exchanges and into mainstream payments.
U.S. officials have argued that dollar-backed stablecoins could strengthen the international role of the dollar.
But banking regulators have raised questions about financial stability and money laundering.
Another concern involves the relationship between stablecoins and traditional banks.
If consumers move large amounts of money from bank deposits into stablecoins, banks could potentially lose a source of funding.
That could change how financial institutions operate.
Tokenized deposits represent another approach.
Rather than creating a separate digital currency, banks could use blockchain technology to represent conventional deposits digitally.
The debate is becoming increasingly important in the United States.
American policymakers are trying to establish rules for stablecoins while encouraging financial innovation.
The outcome could determine whether stablecoins become a mainstream payment technology or remain primarily an instrument used inside digital-asset markets.
For fintech companies, the decision could create an enormous new market.
For banks, it could determine whether blockchain becomes a competitor or a new technology layer for existing financial services.
