Bank for International Settlements: Stablecoins have not passed the "three key tests" and are unlikely to become the core of the future monetary system
ChainCatcher news, according to The Block, the Bank for International Settlements (BIS) stated in a report released on Tuesday that stablecoins do not qualify as money. The institution, known as the "central bank of central banks," pointed out in the report that digital assets pegged to fiat currencies failed to meet the "three key tests" required to constitute the core of a monetary system: singleness, elasticity, and integrity.The authors of the report wrote in this annual publication, "It remains to be seen what role stablecoins will play in the future monetary system." The report focuses on the next generation of financial systems. "However, stablecoins perform poorly in the three core characteristics necessary for building a sound monetary system, and therefore cannot serve as a pillar of the future monetary system." Nevertheless, the report also acknowledges that stablecoins have certain advantages, such as programmability, pseudonymity, and providing convenient access for new users.Additionally, from a technical perspective, they have the potential to offer lower costs and faster transaction speeds in cross-border payments. However, the authors also pointed out that compared to currencies issued by central banks and instruments issued by commercial banks and other private entities, stablecoins may pose systemic risks, such as undermining government monetary sovereignty (sometimes achieved through "implicit dollarization") and facilitating illegal activities. Although stablecoins play a clear role as channels for funds in and out of the crypto ecosystem and are widely used in countries with high inflation, strict capital controls, or limited access to dollar accounts, the BIS stated that these assets should not be viewed as "cash."
