Key Facts

• The Bank for International Settlements warned that stablecoins risk fragmenting the global financial system, according to a statement from the Basel-based institution.
• Private digital tokens, such as stablecoins, fall short of the requirements for sound money, according to the BIS.
• The BIS urged policymakers to accelerate work on tokenized forms of central bank and commercial bank money as an alternative to private digital tokens.
• The institution's warning implies that if stablecoins become widely adopted, they could undermine the cohesion and stability of the global financial system.
• The BIS is focused on the development of tokenized forms of central bank and commercial bank money, which it apparently considers a more reliable and stable form of digital currency.