🚨 Bank for International Settlements (BIS) Issues Strong Warning on Stablecoins 🚨
The BIS report highlights critical concerns about stablecoins, stating they fail key monetary tests and are unfit to serve as the foundation of the financial system.
Key issues raised include:
🔸 Unity: Stablecoins suffer from issuer-dependent pricing, lacking uniform value stability.
🔸 Elasticity: They require full 100% pre-funding, limiting flexibility in supply adjustments.
🔸 Integrity: Inconsistent enforcement of KYC and AML standards raises compliance risks.
⚠️ BIS also warns stablecoins may:
Undermine national monetary sovereignty
Facilitate financial crimes despite their technical benefits like programmability, accessibility, and fast, low-cost transfers.
📉 Following the report, Circle shares dropped 15%, reflecting market concerns over regulatory and systemic risks.
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