BIS: Stablecoins fail “three key tests”

PANews reported on June 25 that according to The Block, the Bank for International Settlements report pointed out that digital assets linked to legal tender have not passed the three key tests of unity, resilience and integrity and cannot become the pillars of the monetary system. The bank's authors said that although stablecoins have advantages such as programmability and pseudo-anonymity, their technical attributes may make their cross-border payments low-cost and fast, and their role in the entry and exit channels of the cryptocurrency ecosystem and countries with high inflation is gradually becoming apparent, but compared with issuing tools such as central banks and commercial banks, they may undermine the government's monetary sovereignty and encourage crime, and should not be regarded as cash. Specifically, stablecoins are difficult to pass resilience tests due to their structure, and additional issuances must be paid in full in advance; they are issued by centralized entities, with different standards and settlement guarantees, which undermines unity; and not all issuers follow standardized KYC/AML guidelines, which are insufficient in terms of integrity.