The Bank for International Settlements (BIS) has raised concerns that the fast growth of US dollar-backed stablecoins could destabilize banks and the broader financial system. BIS General Manager Pablo Hernández de Cos noted that stablecoins act more like ETFs than cash, creating structural risks. Sudden redemptions could cause market stress and force asset sales, hurting banks. The warning adds pressure to the digital asset market, where the fear and greed index remains a key barometer for investor sentiment.Story Highlights

• BIS warns US dollar stablecoins could disrupt banks and financial systems if growth continues unchecked globally.

• Pablo Hernández de Cos says stablecoins behave more like ETFs than cash, raising structural concerns.

  

• Rapid withdrawals from stablecoins could trigger market stress and force asset sales, impacting banks.

  

The Bank for International Settlements (BIS) has warned over the rapid growth of US dollar-backed stablecoins, raising concerns about liquidity stress and systemic risk. Stablecoins like USDT and USDC remain near $1, but their rapid growth and structural risks are driving policy concern.

This indicates rising pressure for stricter global regulation as stablecoins move closer to mainstream finance.

Stablecoins Growing Faster Than Regulation

Speaking in April 2026 in Tokyo, BIS General Manager Pablo Hernández de Cos said these digital tokens could have “material consequences” for financial stability if they grow large enough to compete with traditional money.

Stablecoins like USDT and USDC have become widely used for payments, trading, and cross-border transfers. Their appeal lies in speed and ease of use.

He noted that while stablecoins offer innovation, they still fall short as a true form of money. Instead, he said they behave more like financial products.

“In this respect, they currently operate more like exchange-traded funds than like money.”

This means their value can sometimes move away from $1, especially during market stress, raising concerns for users.

Risk of Bank Runs and Market Stress

One of the biggest warnings from BIS is about sudden withdrawals.

Stablecoin issuers hold reserves in short-term government bonds and bank deposits. If users rush to withdraw funds during a crisis, issuers may be forced to sell these assets quickly. This could create pressure across financial markets and even affect banks.

De Cos warned that such “runs” could spread risk across the system.

“Runs on stablecoins could trigger market stress,” he said, adding that proper safeguards are still missing.

Concerns Around Regulation and Illicit Use

Another major issue is regulation.

Because many stablecoins operate on public blockchains and use private wallets, a large part of activity happens outside traditional monitoring systems. This creates challenges for anti-money laundering controls.

The BIS is now urging stronger global coordination to manage these risks and prevent misuse.

Europe and Global Regulators Step In

Governments are already responding. In Europe, officials are pushing for tighter rules on non-euro stablecoins. The European Central Bank has also raised concerns about liquidity risks.

In the UK, lawmakers have questioned whether stablecoins could drain bank deposits or trigger bank-like crises.

Meanwhile, Switzerland has started testing regulated stablecoins within controlled environments.

What Happens Next?

The next phase will likely bring tighter control. De Cos suggested that risks could be reduced if stablecoin issuers had access to systems like deposit insurance or central bank support.

He also pointed out that limiting interest payments on stablecoins could reduce their appeal compared to bank deposits.