BIS bets on tokenized deposits instead of stablecoins: how central banks are testing a new payment system

Stablecoins in their current form are not suited to the role of a mass payment instrument, and the foundation of future digital payments could be tokenized bank deposits. This position was voiced on August 28 by the General Manager of the Bank for International Settlements (BIS), Pablo Hernández de Cos, at the economic symposium in Jackson Hole.

This is not just a theoretical alternative to cryptocurrencies. The BIS, together with major central banks and commercial banks, is already testing a system in which ordinary bank money is transferred to a programmable digital infrastructure and can move almost as quickly and automatically as crypto tokens.

Why the BIS does not consider stablecoins a full replacement for money

Stablecoins are digital tokens whose value is usually pegged to the dollar, euro, or another traditional currency. The best-known examples are USDT and USDC.

Their main advantage is obvious: money can be transferred around the clock, including between countries, and operations are easily integrated into blockchain services and smart contracts.

However, the head of the BIS believes that for mass everyday payments, the current model still has fundamental problems.

• No guaranteed single value. Even stablecoins pegged to a single currency can trade at a deviation from face value, and moving between different tokens requires exchange.
• Systems are fragmented. Stablecoins exist on different blockchains and infrastructures that are not always directly compatible with each other.
• Risks for banks. If the public moves money en masse from bank accounts into stablecoins, banks lose part of their deposit funding.
• Financial oversight becomes complicated. The BIS points to money laundering risks and difficulties in applying transaction requirements uniformly across different platforms.

According to de Cos, stablecoins may continue to exist and serve specialized functions, but the bulk of ordinary payments is more logically kept within the regulated banking system.

What is a tokenized deposit

A tokenized deposit may outwardly resemble a stablecoin, but legally and economically it is structured differently.

It is an ordinary deposit at a commercial bank, represented in digital form on a programmable platform. Its owner remains the bank's client, and the obligation to return the money rests with the bank itself.

For example, instead of a record of €1000 in a traditional bank account, the bank may create a digital representation of those same €1000 in a system that supports automatic and around-the-clock operations.

The token remains linked to ordinary bank money and must be exchangeable for it at face value.

The main idea of the BIS is to gain the advantages of blockchain-like infrastructure — speed, programmability, and automatic execution of conditions — without creating a parallel monetary system outside the banks.

How this differs from USDT or USDC

In the case of a regular stablecoin, the user effectively has a claim against a private token issuer that holds reserves — for example, money, short-term government bonds, and other liquid assets.

With a tokenized deposit the scheme is simpler: the money remains an obligation of a regulated bank, just like funds in an ordinary bank account.

That is why the BIS considers such a model more compatible with the current monetary system, where commercial banks work with clients and final settlements between banks occur in central bank money.

Central banks have already tested the system with real money

The BIS's largest experiment is called Project Agorá. Eight central banks and more than 40 private financial institutions are participating.

The project is testing a common programmable infrastructure that unifies tokenized commercial bank deposits and tokenized central bank reserves.

In May 2026, the BIS reported that the prototype was already able to conduct multi-stage international settlements between different currencies on an "all or nothing" basis: either the entire chain of the operation is executed simultaneously, or the payment is not made.

In July, the project moved to trials with real value. The testing involved 28 financial institutions and central banks from Asia, Europe, and North America.

They conducted transactions totaling about 800 thousand Swiss francs in several currencies. Seventeen different scenarios were tested with individual transactions of roughly 9,000 to 125,000 francs or equivalent.

This is still an experiment, not a new international payment system for the public. But it shows that the technology has already gone beyond a computer prototype.

Why change current bank transfers at all

The BIS sees especially great potential for tokenization in international payments.

Today a transfer between banks in different countries may pass through several intermediaries. Banks separately exchange messages, check compliance with requirements, conduct currency operations, and carry out final settlement.

Besides fees, delays arise due to time zones and differing operating hours of payment systems.

On a common programmable platform, several steps can be combined into one operation. For example, sending one currency and receiving another happen simultaneously, which reduces the risk of a situation where one party has already sent the money while the second part of the deal is not yet completed.

In addition, payments can be made conditional: money is automatically transferred only after a predefined event occurs.

Why the growth of stablecoins worries central banks

A separate problem relates to the fact that most of the largest stablecoins are pegged to the dollar.

For the US this may have advantages. US Treasury Secretary Scott Bessent previously argued that the development of dollar stablecoins could strengthen the international role of the dollar and create additional demand for US government bonds, which issuers use as reserves.

The BIS draws attention to the flip side of this model.

If residents of other countries start using dollar stablecoins instead of the national currency, a kind of digital dollarization emerges. For countries with less stable currencies, this could reduce the effectiveness of their own monetary policy.

Moreover, if funds move en masse out of ordinary bank deposits into stablecoins, it becomes more expensive for banks to attract funding. Ultimately, this could potentially be reflected in the cost of loans for businesses and households.

Stablecoins will not disappear anyway

The BIS position does not mean a proposal to ban stablecoins.

De Cos explicitly allows the coexistence of the two systems. Stablecoins can be used for specific specialized tasks, including within digital financial markets, while tokenized bank deposits can become the basis for more mass-scale settlements.

And banking alternatives still have unresolved problems. It is necessary to ensure compatibility of different platforms, define legal rules for payment finality, agree on infrastructure governance, and make it possible to seamlessly transfer digital money from one bank to another's client.

Therefore, the debate is no longer about whether money will become programmable. The main question is who will issue the digital money of the future: individual stablecoin issuers or regulated banks connected through central bank infrastructures.