BIS Warns Stablecoins Can Depeg Even with Full Reserves: Here’s Why

The Bank for International Settlements (BIS) warns that fully collateralized stablecoins can still lose their peg during market runs if reserves become inaccessible. The BIS compares stablecoins to Eurodollars and 19th-century wildcat banks, highlighting their lack of central bank backing and operation across fragmented regulatory jurisdictions without unified oversight.

• →Fully collateralized stablecoins can still depeg if reserves cannot be accessed during market stress or runs
• →BIS compares stablecoins to Eurodollars, noting they lack central bank settlement and repo facilities
• →Stablecoins operate like 19th-century wildcat banks across fragmented jurisdictions without shared regulatory backstops
• →Current stablecoin regulations are following similar patterns to historical banking regulation development
• →Access to reserves during crisis periods is as critical as the actual collateralization ratio