The BIS says stablecoins are an asset, not money. On the substance, it's right.

The Bank for International Settlements, the institution that central banks themselves rely on, just delivered a blunt verdict on stablecoins: they're an asset, not money. In its Annual Economic Report, published on 23 June 2026, the BIS argues that a stablecoin fails three foundational tests of money, singleness, elasticity and integrity, and so behaves more like an ETF share than a dollar sitting in your account.

We read the chapter in full. Our take is probably not the one you'd expect from a company whose accounts run on stablecoin rails: on the systemic substance, the BIS is right. And a regulator being right is the strongest argument we know for how a business should actually use stablecoins.

The three tests, in plain terms

The report measures stablecoins against what makes money trustworthy. Here's what each test means and where today's stablecoins fall short.

Singleness. A dollar has to equal a dollar, across every issuer and every venue, always. Stablecoins don't settle on a central bank balance sheet, so par isn't guaranteed under all conditions. Secondary-market prices drift from the peg, and redemptions carry frictions. The report notes that a deviation "even if tiny" may hold in fair weather but disintegrates when stress hits. Add chain fragmentation: USDT on Ethereum and USDT on Solana sit on separate ledgers and aren't natively the same token. The BIS conclusion is that today's stablecoin resembles an ETF share more than a means of payment.

Elasticity. Banks create liquidity on demand and lean on a lender of last resort. Stablecoins can't. Issuing a coin requires pre-funding a reserve, a cash-in-advance model with no central bank backstop. Under a mass redemption the only exit is selling reserves, which transmits the stress straight into money markets.

Integrity. Pseudonymous transfers on public chains, unhosted wallets, mixers and cross-chain bridges all complicate KYC and AML. The borderless nature of permissionless blockchains invites regulatory arbitrage, and the report ties stablecoins to a meaningful share of illicit on-chain activity.

On all three, the analysis is fair. If you're asking whether a stablecoin is a drop-in replacement for the monetary system, the answer is no.

Where the report has its own agenda

The BIS isn't a neutral referee. It's promoting its own architecture: tokenised central bank reserves, a "unified ledger," and Project Agorá, a prototype running across eight central banks and more than 40 regulated institutions. That's a legitimate vision, but it's a competing one, so the report's own caveats are worth reading closely:

• The market is smaller than the headlines suggest. Stablecoin market cap was roughly $320 billion at the end of May 2026. Real, not enormous.
• Volume is overstated. The widely quoted $28 trillion of 2025 on-chain volume is far higher than actual payment use once you strip out trading, automated activity and same-owner transfers. The BIS itself frames that figure as less than three business weeks of US wholesale settlement.
• Most candidly, the report admits that cross-border savings are often overstated. Once on-ramp and off-ramp costs, fees and spreads are included, the all-in cost of a stablecoin transfer can be no lower than a bank wire.

And here's the thing the tests quietly assume: they judge a stablecoin as money. A business paying a contractor in another country isn't trying to replace the dollar. It's trying to get a settlement done by Friday.

A stablecoin is a rail, not a vault

That reframing is the whole point. A stablecoin's strength is moving value and settling around the clock, not storing capital. Businesses win on speed, programmability and cross-border reach. They lose the moment they treat a stablecoin like a bank account and park their treasury in it.

The useful move is to read each BIS test as an operational risk you can close at the edges:

Risk (BIS test)	What it means in practice	How you close it
Singleness	Depeg, slippage, wrong network	Regulated issuers (USDC under MiCA and the US GENIUS Act), an explicit network, a fast and predictable off-ramp
Elasticity	Liquidity risk at redemption	Diversify providers and issuers; treat the stablecoin as transit, not treasury
Integrity	AML, sanctions, frozen addresses	KYC and KYT at the on- and off-ramp, address screening, transparent issuer reserves

None of that requires a stablecoin to be money. It requires the rail to be wrapped in the right controls at the fiat boundary.

Why the BIS critique is a case for Localbridge

Here's the twist. What the BIS effectively recommends to regulators, integrity handled at the user interface, KYC-verified addresses, multi-provider arrangements, and redemption into regulated fiat, is exactly the shape of a compliant, multi-provider ramp. The critique that lands hardest on a single-issuer, store-of-value model barely touches a settlement rail built with those safeguards.

Localbridge doesn't try to turn stablecoins into new money. We build the bridge between fiat and token, and we built it on the part of the system the largest payment companies are now standardizing:

• You operate in plain USD and EUR. The balance sits on dollar stablecoin rails (USDC or USDT) run by Bridge, part of Stripe. The token layer stays under the hood.
• Multi-provider by design. No dependence on one issuer. The singleness and elasticity critiques hit mono-issuers hardest, and diversification defuses them.
• Regulated rails, KYC and KYT. Integrity is handled exactly where the BIS wants it, at the fiat-token boundary, by licensed partners.
• Ramp quality is the product. Since the value isn't a "free transfer" but a predictable on- and off-ramp, that's what we optimise: speed, cost, and the off-ramp actually landing.

If you want the longer version of how the account works, see how it works, and for the rails story read why Stripe, Visa and Mastercard building on stablecoins points at the same infrastructure.

The bottom line

The BIS is right: a stablecoin is not a replacement for money. But it was never meant to be one. For a business it's a fast, programmable settlement layer, and its value shows up precisely when it's wrapped in the safeguards a regulator asks for. We build that perimeter by default, so you get the rail without inheriting the risks the report describes.

FAQ

Did the BIS ban stablecoins? No. The Annual Economic Report 2026 is analysis, not regulation. It argues that stablecoins fail three tests of money, singleness, elasticity and integrity, and so function as an asset rather than full money. It doesn't outlaw them, and it acknowledges they have real uses as a settlement rail.

What are the three tests of money the BIS uses? Singleness (a dollar always equals a dollar, redeemable at par), elasticity (the system can supply liquidity on demand, backed by a lender of last resort), and integrity (consistent KYC and AML, with auditable trails). Stablecoins fall short on all three when judged as money.

Does this mean stablecoins are unsafe for business payments? Not if you use them as a rail rather than a vault. The risks the BIS names, depeg, liquidity at redemption, and AML exposure, are manageable with regulated issuers, multiple providers, and KYC and KYT at the on- and off-ramp. The danger is treating a stablecoin as a place to store your treasury.

Are stablecoins actually cheaper for cross-border transfers? Sometimes, but not automatically. The BIS points out that once fees, spreads and on- and off-ramp costs are included, the all-in cost can match a bank wire. The real edge is speed and round-the-clock settlement, plus reach into countries where opening a local account is hard. A good ramp is the part that decides whether the cost advantage is real.

Is Localbridge a bank? No, and we don't pretend to be. You get a multi-currency account that behaves like ordinary banking, while licensed partners handle the regulated entities, KYC and KYB, and the rails underneath. You operate in USD and EUR; the stablecoin layer settles in the background.