Pablo Hernández de Cos, general manager of the Bank for International Settlements, told the Federal Reserve Bank of Kansas City’s Jackson Hole Economic Policy Symposium on 28 August 2026 that stablecoins in their current form “do not yet uphold the foundational properties of money” and should not carry the bulk of day-to-day payments.
What he actually said
The published remarks, titled “Pushing the monetary frontier: stablecoins and tokenised deposits,” are the primary record. Reuters and PYMNTS matched the core claims the same day.
The BIS is the Basel-based club of central banks. De Cos opened a panel at a symposium whose official theme this year was “Financial Innovation: Implications for Payments and Policy.” Fed Chair Kevin Warsh’s keynote the same morning stayed on inflation and rates. De Cos took the payments question.
A tokenized deposit is a bank liability on a programmable ledger: the dollar still sits on the bank’s balance sheet. A stablecoin such as Tether’s USDT or Circle’s USDC is a claim on a non-bank issuer, usually reserve-backed and free to move on public chains. This desk has already covered the bank side of that split: Wells Fargo’s fall USD–GBP deposit-token pilot and the Clearing House network aimed at 2027.
De Cos said the two can coexist. Tokenized deposits “should carry the bulk of day-to-day payments and wholesale settlement.” Stablecoins “may serve specialised roles,” for example in decentralised lending, and only under rules that enforce par redemption if they are used to pay.
Three tests he says stables still fail
The speech judges both products against properties the BIS treats as non-negotiable: a common unit of account, singleness (every instrument in that unit redeemable at par into central-bank money), interoperability, and financial integrity. The 2026 Annual Economic Report chapter used the same frame.
On singleness, he used a named example. Ben holds USDT; Marie will only take USDC. Ben has to sell one token in the secondary market to buy the other. “Deviations from par in secondary markets are the norm, and sizeable under stress,” he said. Nothing forces those two dollars to be the same dollar.
On interoperability, dollar stables live on public chains that do not talk to each other without bridges. Tokenized deposits today sit on permissioned platforms that are also fragmented. His fix for the bank product is tokenized central-bank reserves as a shared settlement asset. He did not offer an equivalent fix for public-chain stables.
On integrity, he cited evidence that most stablecoin balances sit in self-custodied wallets, with more transfers moving wallet-to-wallet outside KYC venues. He treated that as an AML problem. For anyone who holds their own keys, it is also the product working as designed: the coins move without a bank’s permission. His preferred path is account-based and supervised, which means the bank holds the relationship.
Three questions, he said, still have to be answered before stables can “credibly function as a means of payment at scale”: par redemption in every state of the world, including runs; settlement finality across chains without ad-hoc bridges; and AML rules that reach peer-to-peer transfers. Policy can tighten reserves and redemption rights. Chain fragmentation and pseudonymous rails, he argued, are harder.
He also admitted the bank alternative is not ready. “At present, there are no multi-bank or inter-jurisdictional ecosystems issuing tokenised deposits in an interoperable framework.” Current examples are permissioned silos or “designs better characterised as bank-issued stablecoins,” which share many of the same shortcomings.
Dollar stables already settle the region he flagged
The speech’s emerging-market line is the part that lands in Latin America. “The growing adoption of dollar-pegged stablecoins has also raised concerns in some jurisdictions about monetary sovereignty and the potential for digital dollarisation,” de Cos said, a line Reuters carried. He handed the emerging-market detail to IMF managing director Kristalina Georgieva on the same program, then added a lesson for every country: “sound macroeconomic policies and efficient domestic payment systems are the best bulwark against undue ‘stablecoinisation’.”
That “bulwark” already exists in Brazil as Pix. It has not stopped residents from buying dollar tokens. Banco Central do Brasil’s H1 2026 books, which this desk walked through on 16 August, put resident crypto purchases at $14.68 billion, with 90–95% of identified demand in stablecoins. In Argentina, dollar stables are the everyday hedge against the peso. Those flows are payroll, savings, and cross-border settlement because the local unit of account keeps losing purchasing power.
U.S. Treasury Secretary Scott Bessent has argued the other way: dollar stables as a digital-dollar export that creates demand for Treasuries. Reuters set that claim next to de Cos’s warning that a shift of deposits into stables can raise bank funding costs and, with them, borrowing costs. Washington gets a buyer of bills. São Paulo and Buenos Aires get a dollar they can hold at 2 a.m. without a bank’s opening hours.
De Cos wants payments inside a supervised two-tier system anchored in central-bank money. That is a coherent central-bank brief, and it is one in which you do not hold the keys. If a bank tokenizes your deposit, you still have a bank counterparty. If you hold USDT in a wallet you control, you have issuer and chain risk, and you can leave. Those are different products. Calling the second one “not money” does not put the first one on Pix at midnight.
What to watch next
Three checkpoints will show whether Friday’s speech is a map or a sermon:
- Shared bank rails. Whether Wells Fargo’s fall pilot, the Clearing House 2027 build, and peers such as JPMorgan’s deposit token start settling with each other in central-bank money, or stay as branded silos.
- Par and redemption rules. Whether U.S. and other stablecoin statutes actually answer his three questions (always-on par, cross-chain finality, P2P integrity) or only license issuance.
- LatAm usage. Whether Pix, SPEI, and local VASP rails keep moving USDT and USDC as everyday settlement, or any named bank in the region ships a deposit token people can actually spend.
Takeaway
On 28 August 2026 the BIS chief told Jackson Hole that dollar stablecoins in their current form fail the tests of money at scale, and that tokenized bank deposits should do the everyday payments job. The text is on the BIS site; Reuters and PYMNTS confirmed the quotes.
Treat the speech as a central-bank design brief, not a reason to move savings onto a bank ledger. Tokenized deposits are worth watching as bank plumbing. They are not a substitute for coins you can send without asking. This is reporting, not a recommendation to hold or avoid any token.
