An organization representing the world's major central banks said that although demand for stablecoins has risen sharply, this crypto asset should not become a pillar of the future monetary system. The Swiss-based Bank for International Settlements said in its annual economic report that stablecoins failed to meet the requirements needed to ensure a sound monetary arrangement. A stablecoin is a cryptocurrency linked to traditional asset classes such as the US dollar. The members of the Bank for International Settlements include the Federal Reserve, the Bank of Japan, and the European Central Bank. According to the report, crypto assets have become the first choice for illegal uses to bypass security measures. The Bank for International Settlements said that personal identity is hidden behind the wallet address, which protects privacy, but also facilitates illegal use. Stablecoins can circulate without issuer supervision, raising concerns about their use in financial crimes such as money laundering and terrorist financing. “If stablecoins continue to grow, they may pose financial stability risks, including the tail risk of underselling safe assets.” The Bank for International Settlements said that the future role of stablecoins is still uncertain, but they should only play a supporting role at best.

An organization representing the world's major central banks said that although demand for stablecoins has risen sharply, this crypto asset should not become a pillar of the future monetary system. The Swiss-based Bank for International Settlements said in its annual economic report that stablecoins failed to meet the requirements needed to ensure a sound monetary arrangement. A stablecoin is a cryptocurrency linked to traditional asset classes such as the US dollar. The members of the Bank for International Settlements include the Federal Reserve, the Bank of Japan, and the European Central Bank. According to the report, crypto assets have become the first choice for illegal uses to bypass security measures. The Bank for International Settlements said that personal identity is hidden behind the wallet address, which protects privacy, but also facilitates illegal use. Stablecoins can circulate without issuer supervision, raising concerns about their use in financial crimes such as money laundering and terrorist financing. “If stablecoins continue to grow, they may pose financial stability risks, including the tail risk of underselling safe assets.” The Bank for International Settlements said that the future role of stablecoins is still uncertain, but they should only play a supporting role at best.