Former BIS Chief Backs Stablecoins Coexisting With Fiat

Agustín Carstens, former general manager of the Bank for International Settlements, told a livestreamed welcome address at the Point Zero Forum on Tuesday that stablecoins can promote financial innovation, widen access and reduce costs. He urged regulators to set conditions for stablecoins to operate alongside fiat currencies and called for coordinated global rules.

The comments mark a softer stance than the warnings Carstens issued while leading the BIS. In January 2022 he warned stablecoins might not function as “sound money” because issuers could be tempted to invest reserves in risky assets to earn returns. In one of his final BIS addresses in June 2025 he cautioned stablecoins could create liquidity risks and did not meet key tests required of money.

Current BIS leadership has remained cautious. Pablo Hernández de Cos, Carstens’ successor, said in April the stablecoin market is still small and that structural features limit their ability to act as money. A BIS preview released ahead of the Annual Economic Report 2026 found many existing stablecoin designs lack properties that support public trust in money and warned wider adoption could create challenges for financial stability, bank funding and monetary sovereignty.

At the forum Carstens called for clearer, harmonized regulation to build trust in issuers and support safe development. He said, “I have come to appreciate what stablecoins can do to promote financial innovation, inclusion and to reduce costs.” He added that equal regulatory treatment for issuers could let stablecoins “flourish in a dramatic way” and warned international cooperation on rules is lagging.

Regulators in major jurisdictions have introduced specific requirements. The GENIUS Act, signed into U.S. law in July 2025, requires payment stablecoins to hold 100% reserves in high-quality liquid assets such as cash and short-term U.S. Treasuries. The European Union’s Markets in Crypto-Assets Regulation requires issuers to obtain authorization, publish an approved white paper, maintain full reserve backing and segregate reserve assets from company funds.

The BIS has supported tokenizing assets within the existing two-tier banking system, saying digital representations could enable programmable finance while preserving trust in money. Carstens noted the potential of tokenization but said practical progress will depend on consistent global rules and supervisory cooperation.

International authorities continue to debate stablecoin designs and oversight, including how to protect financial stability, bank funding and monetary sovereignty.