Bank for International Settlements report: Stablecoins fail three key tests for currencies

The Bank for International Settlements (BIS) recently pointed out that stablecoins still do not meet the requirements of being the backbone of the monetary system in three key tests of unity, resilience, and integrity. In a report titled "The Next-Generation Monetary and Financial System," the BIS said that tokenization represents a transformative innovation that both improves the old and empowers the new. It paves the way for new landscapes in cross-border transfers, securities markets, and beyond. Tokenized platforms centered around central bank reserves, commercial bank currencies, and government bonds could lay the foundation for the next generation of monetary and financial systems. Stablecoins have shown some promise in terms of tokenization, but they still fall short of the requirements to become the backbone of the monetary system in the three key tests of unity, resilience, and integrity. (The Paper)