Tether CEO Blasts BIS Push for Tokenized Bank Deposits

Paolo Ardoino, chief executive of Tether, criticized the Bank for International Settlements after the BIS urged banks and regulators to explore issuing tokenized bank deposits on distributed ledgers.

The BIS has described tokenized deposits as bank liabilities recorded on a distributed ledger that could speed settlement and connect more easily with digital finance services. The institution presented the approach as one way for regulated banks to compete with privately issued stablecoins and to preserve banks’ role in the payments system.

Ardoino argued that encouraging bank-issued tokenized deposits risks giving incumbent banks a competitive edge over non-bank firms. He said such a stance could change market dynamics, reduce interoperability between payment systems and raise barriers for alternative stablecoins that serve global crypto users.

He raised privacy and data governance concerns, noting that tokenized deposits issued by banks would be subject to know-your-customer and reporting rules. Ardoino warned that consumers seeking privacy-preserving or permissionless payment rails might see fewer options and called on regulators to apply similar custody, disclosure and consumer-protection rules across different token types and issuers.

Supporters of tokenized deposits say they would combine the safety of bank liabilities with faster, ledger-based settlement, potentially lowering counterparty risk and improving cross-border payments. Critics say the model could concentrate liquidity in a small number of large banks and limit the development of diverse payment systems.

The debate over tokenized bank deposits is part of wider policy discussions that include central bank digital currencies and privately issued digital tokens. The BIS, based in Basel, Switzerland, publishes research and policy advice for central banks on financial stability and payment-system design.

Ardoino called for regulatory neutrality that treats private stablecoins and bank-issued tokenized deposits under clear, consistent standards so different digital payment options can operate on comparable terms.