What BIS Gets Right And Wrong About The Future of Stablecoins

Seven central banks, 43 major financial institutions, and the Bank for International Settlements (BIS) announced Project Agorá in 2025. The goal: a unified ledger delivering blockchain speed and programmability while keeping central bank money at the core.

Everything stablecoins promise, minus the counterparty risk of trusting Tether’s reserves.

The BIS made its case for this system by laying out three tests that any sound money system must pass:

• Singleness: Every unit of currency should be equal.

• Elasticity: Money supply should expand and contract with economic needs.

• Integrity: The system should resist illicit activity.

Their claim is that private stablecoins fail all three.

Singleness fails because USDT and USDC carry different risk profiles. Moody's documented over 600 de-pegging events for large stablecoins between 2022 and 2023. These aren't dollars trading at par; they're claims that usually do. Elasticity fails because stablecoins require 100% reserves. You cannot lend them into existence the way banks create money through credit. Integrity becomes complicated when bearer instruments live on pseudonymous blockchains, creating compliance gaps traditional banking resolved decades ago.

If Project Agorá delivers instant settlement with central bank finality, the logic goes, why would any institution accept private issuer risk?

The answer depends entirely on which market segment you're serving.

The Needs of Institutions

For massive institutional treasury operations, the BIS is likely correct. A major banking institution managing trillions in annual flows cannot accept dozens of de-pegging events a year across multiple counterparty tokens. The risk is too high, and for these institutions managing risk is paramount.

When a single failed payment creates unacceptable exposure, central bank guarantees beat permissionless systems every time. Banks need money that can expand through lending to power their basic operations. Regulators demand audit trails that pseudonymous blockchains complicate.

This segment of “risk averse” capital flows represents 90% of cross-border payment volume.  It also generates the lowest margins, because correspondent banking already works reasonably well here. High-value institutional transfers settle in under an hour through existing infrastructure. The BIS three tests matter absolutely in this segment, and central bank tokenized deposits will likely dominate it should they materialize.

But cross-border payments are not a single market. They are actually two fundamentally different businesses with different economic and logistical needs.

The Needs of Everyone Else

The 10% of volume that generates 33% of revenue looks nothing like institutional treasury. A migrant worker in Dubai sending $200 home does not care about monetary elasticity or reserve lending, neither does the PSP that powers that transaction. Both care that traditional rails consume 6% in fees while stablecoins cost fractions of a percent.

An Argentine watching 200% annual inflation does not care about singleness across issuer risk profiles, nor does the payroll provider or Neobank ensuring they get paid. Each cares deeply that unlike the peso, USDT provides dollar stability.

An Indonesian SME does not optimize for integrity frameworks. They want payment that settles today instead of waiting five days while correspondent banks route through three intermediaries.

The BIS's "failures" become acceptable tradeoffs when measured against real world alternatives for these stakeholders.

This is where private stablecoins already won. Latin American corridors run on them because necessity drove adoption faster than regulation. Exotic currency pairs where direct liquidity barely exists get bridged through USDT because waiting for central banks to build infrastructure means waiting indefinitely. The retail and emerging market segment optimizes for completely different variables than institutional wholesale.

Segmentation Trumps Consolidation

The future then isn’t one single vision, but two market segments operating in parallel, doing what each does best.

We already see this segmentation in action. Citi projects tokenized bank deposits could reach $100 to $140 trillion in annual volume by 2030. Simultaneously, public stablecoins could hit $100 trillion. Both numbers are massive. Both can be true because they serve different segments with different needs.

Major institutions are learning how to work with and integrate the advantages of privately issued stablecoins into their stacks. Swift is adopting blockchain rails. Major banks are partnering with fintechs to build on stablecoin infrastructure to power exotic corridors while simultaneously developing central bank token capabilities. The firms that win will be those that can route across both architectures, understanding which tool serves which segment.

For builders, the strategic question is not which vision prevails. It is which segments you serve and what those segments optimize for. If you are building for institutional treasury, your advantage will not be "faster and cheaper." Central bank tokens will match that. Your advantage becomes trust, regulatory compliance, and seamless interoperability across both private stablecoins and bank tokens. If you are building for retail and emerging markets, accessibility and local knowledge create moats that institutional features cannot replicate. Speed to market matters because these users need solutions now, not after the next regulatory framework finalizes.

Five years forward, the landscape likely splits. Wholesale and institutional flows settle on unified ledgers backed by central bank money. Retail cross-border payments and emerging market corridors remain dominated by private stablecoins. An interoperability layer connects both, routing payments through whichever infrastructure serves that particular transaction's needs. Regional variation persists because context determines adoption. Latin America might run 80% on private stablecoins while developed Asian markets lean toward bank tokens.

So, BIS is right. By their metrics, private stablecoins aren’t “money,” and that means something in the contexts that are important to them, however, the world doesn’t necessarily need all its “money” to be money, what it needs are rails that can support cross-border payments everywhere on the globe quickly and reliable. For that purpose, privately issued stablecoins still have an important place.

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