BIS says stablecoins may accelerate bank deposit outflows

Stablecoins could accelerate bank deposit outflows and affect monetary policy across countries by enabling 24-hour trading and payments, the Bank for International Settlements said in a recent report analyzing 130 economies, according to Cointelegraph. The BIS said demand for stablecoins tends to rise during declines in the value of local currencies or in financial crises, and stablecoins are generally less affected by capital controls than traditional foreign-currency deposits. The BIS added growing stablecoin demand could increase downward pressure on local currencies and raise dollar funding costs. Cointelegraph added another view suggests stablecoins are more likely to reduce intermediary steps in cross-border payments than to fully replace banks.