BIS Classifies $320B Stablecoin Market as More Like ETFs Than Money, Flags FX Risks on June 29

According to the Bank for International Settlements, on June 29, the BIS classified stablecoins as resembling exchange-traded funds more than genuine money in its Annual Economic Report 2026. The report notes that stablecoins trade at prices deviating from their pegged value and carry redemption frictions similar to ETF shares. The global stablecoin market reached approximately $320 billion by end of May 2026, with over 99% pegged to the U.S. dollar and dominated by Tether's USDT and Circle's USDC. Unlike true money, stablecoin transfers do not settle on central bank balance sheets, limiting their monetary characteristics.

The BIS identified significant risks to foreign exchange markets from rising flows of non-dollar currencies into U.S. dollar-pegged stablecoins, which can weaken domestic currencies and raise FX swap costs. The report also flagged structural enforcement challenges: stablecoins' digital bearer-like nature and unhosted wallets make traditional capital controls far less effective than those applied to bank deposits, complicating cross-border regulatory oversight.