top of page

"Stablecoins Are Not Money" – True or Not?

ree

Recently the Bank for International Settlements (BIS) recently declared that stablecoins are not money.


Traditional currencies gain legal power through explicit national recognition, but Stablecoins are different. Some of them are regulated, some of thrm are not - so they remain classified as financial products rather than legal currencies.


So does it mean that your stablecoins can disappear the moment the issuer changes their terms or runs low on liquidity?


Well, they have no guaranteed global protection, and no one owes you anything when things go wrong. They are not like E-money, even though they need to be backed up 1:1 by the issuer, this money can be used by banks via fractional banking - and therefore can create a bank run and another financial crisis easily.


If your business relies on Stablecoins or Banks / Fintechs who use them to store value, settle payments, or operate across borders, you have to understand and mitigate your risk.


 
 
bottom of page