Agustin Carstens, former BIS chief, advocates for regulations to allow stablecoins to coexist with fiat currencies, emphasizing the need for global coordination.
Agustin Carstens, the former General Manager of the Bank for International Settlements (BIS), expressed his belief that stablecoins can foster financial innovation, inclusion, and lower costs during the Point Zero Forum in Zurich.
"We should strive to create conditions where we can coexist with fiat money and stablecoins," Carstens noted.
He emphasized the need for international regulatory coordination to facilitate the interaction of stablecoins with global currencies, a necessity he believes is currently unmet.
This statement signifies a notable shift from Carstens' earlier criticisms of digital currencies. Previously, he had warned that stablecoins could be unreliable due to the potential risks associated with their issuers investing reserves in volatile assets. In past remarks, he highlighted that stablecoins often fail to meet essential monetary criteria, such as stability and protection against illicit activities.
While his recent comments suggest a more accommodating view toward stablecoins, Carstens clarified that this does not equate to unconditional endorsement. He stressed that stablecoins can only thrive alongside fiat currencies under a framework of agreed regulations.
Despite Carstens' evolving perspective, the BIS continues to uphold a cautious stance on stablecoins. A chapter from its Annual Economic Report 2026, released on June 23, pointed out that while stablecoins have certain advantages, they lack the fundamental characteristics of trusted money and could jeopardize financial stability and monetary sovereignty.
The BIS advocates for the integration of tokenization within a regulated banking environment, emphasizing the importance of central bank money, bank deposits, and clear legal structures. According to the BIS, stablecoins are considered private assets reliant on issuer rules and transaction frameworks.
The shift in Carstens' rhetoric comes amid ongoing developments in stablecoin regulations in the U.S. and EU, with the U.S. introducing the GENIUS Act and the EU advancing its Markets in Crypto-Assets (MiCA) framework. However, Carstens pointed out that national regulations alone are insufficient for the cross-border functionality of stablecoins, underscoring the need for global regulatory collaboration.
Looking ahead, Rive Collins, a Tether co-founder, predicted that within five years, all currencies could be represented as stablecoins, suggesting these digital assets will become the predominant medium for transactions. Meanwhile, Jefferies analysts forecast that the stablecoin market capitalization could reach $1.15 trillion over the next five years, prompting banks to prepare for potential deposit outflows.
