Stablecoins are more like investments than cash, warns BIS chief

Bank for International Settlements (BIS) General Manager Pablo Hernández de Cos has warned that stablecoins are closer to investment products than cash and could pose a significant threat to financial stability if they continue to grow, Cointelegraph reported. He stated that the current structure of stablecoins, particularly dollar-pegged ones like USDT and USDC, has limitations for widespread use as a payment method. Because their reserves consist of short-term government bonds and bank deposits, he argued that market instability could trigger massive capital outflows and a subsequent chain reaction. De Cos emphasized the need for global cooperation on regulation, noting that if dollar stablecoins grow large enough to compete with fiat currencies, they could have a tremendous impact on both financial stability and global economic policy.