Banks shift transactions to public blockchains
Global banks are moving payment and settlement activity to public blockchains even as the BIS general manager said stablecoins do not meet core properties of money and urged tokenized deposits instead. A BCG and Allium white paper estimated public blockchains processed over $62 trillion in stablecoin transactions in one year, but only about $4.2 trillion were payments in the real economy. Major banks and a consortium of more than a dozen institutions are preparing bank-issued stablecoins, supported by recent legal changes, while the BIS warned of financial integrity and monetary sovereignty risks from self-custodied tokens.
Only about 7% of stablecoin transfers were real-economy payments.
Context
The BIS general manager spoke at the Jackson Hole symposium and criticized stablecoins. A BCG and Allium paper reported transaction volumes and banks are planning their own tokens. Next, regulators and central banks could weigh tokenized…
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