BIS says stablecoins fail as money, calls for strict limits on their role

The Bank for International Settlements (BIS) argues in its Annual Economic Report 2025 that stablecoins fail as money and should play only a limited, well-regulated role. The report says stablecoins fail the tests of "singleness," "elasticity" and "integrity," describing them as "digital bearer instruments" that resemble financial assets more than money. It says private issuers and fluctuating trading rates undermine singleness, and that full upfront payment for new supply makes them inflexible under shocks. It also says their design, especially on unhosted wallets, makes them prone to money laundering, sanctions evasion and terrorist financing. Circle's stock fell more than 15% after the report, to $222, and crypto commentators criticized the BIS's stance, which Jim Walker of Aletheia Capital called "hysterical."