From https://www.ft.com/content/0beb0276-e991-429c-9af4-4c994f824297
Title : Stablecoins ‘perform poorly’ as money, central banks warn
By Martin Arnold , Jun 2025
[BIS/Bank for International Settlements says they fail crucial tests for a sound currency and are exploited by criminals
Top central bankers have delivered a scathing assessment of stablecoins, saying they “perform badly” on key requirements for being widely used as money, disavowing US President Donald Trump’s push to make them a pillar of mainstream finance.
The Bank for International Settlements said stablecoins fail the 3 main tests of any money because they are not backed by central banks, lack sufficient guardrails against illicit usage and do not have the flexibility of funding needed to generate loans...]
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From https://www.reuters.com/business/fi...delivers-stark-stablecoin-warning-2025-06-24/
Title : Central bank body BIS delivers stark stablecoin warning
By Marc Jones , June 2025
[The BIS/Bank for International Settlements issued its starkest warning yet on the risks posed by stablecoins and urged countries to move rapidly towards the tokenisation of their currencies...
stablecoins lack the traditional settlement function provided by a central bank with fiat money ... also warning of the risk of "fire sales" of the assets backing stablecoins if they collapse, as TerraUSD (UST) and the cryptocurrency LUNA did in 2022.
Poster's Note : Anatomy of a Stablecoin’s failure: The Terra-Luna case (https://www.sciencedirect.com/science/article/abs/pii/S1544612322005359)
There is also the concern around who controls stablecoins...You will always have the question about the quality of the asset backing. Is the money really there? Where is it?
The BIS wants central banks to go down the route of tokenised "unified ledger" incorporating central bank reserves, commercial bank deposits and government bonds.
It would mean central bank money remains both the primary means of global payment and that currencies and bonds from around the world could effectively be integrated into the same "programmable platform".
Tokenisation is aimed at creating a digitalised central bank system that settles payments and securities trades almost instantaneously and more cheaply by cutting the need for certain time consuming checks, as well opening up new functionality.
It can also make the system more transparent, resilient and interoperable and may protect the system from some of the more unpredictable elements of cryptocurrencies...]
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From https://corporatefinanceinstitute.com/resources/cryptocurrency/what-happened-to-terra/
Title : What Happened to Terra?
Written by CFI Team , reviewed by Andrew Loo
[Over the course of a week’s time in 2022, the collapse of stablecoin Terra and its sister token, Luna, wiped out almost an estimated half-a-trillion USD from the cryptocurrency markets. So what is Terra and how did this happen...
in May of 2022, Terra experienced the cryptocurrency equivalent of a bank run, where depositors lost confidence in the tokens and all raced for the door at the same time. By May 16, the Terra stablecoin and Luna token were all but dead, with some media outlets calling it a Ponzi scheme while others were calling it a rug-pull scam ...]
Title : Stablecoins ‘perform poorly’ as money, central banks warn
By Martin Arnold , Jun 2025
[BIS/Bank for International Settlements says they fail crucial tests for a sound currency and are exploited by criminals
Top central bankers have delivered a scathing assessment of stablecoins, saying they “perform badly” on key requirements for being widely used as money, disavowing US President Donald Trump’s push to make them a pillar of mainstream finance.
The Bank for International Settlements said stablecoins fail the 3 main tests of any money because they are not backed by central banks, lack sufficient guardrails against illicit usage and do not have the flexibility of funding needed to generate loans...]
-------------------------
From https://www.reuters.com/business/fi...delivers-stark-stablecoin-warning-2025-06-24/
Title : Central bank body BIS delivers stark stablecoin warning
By Marc Jones , June 2025
[The BIS/Bank for International Settlements issued its starkest warning yet on the risks posed by stablecoins and urged countries to move rapidly towards the tokenisation of their currencies...
stablecoins lack the traditional settlement function provided by a central bank with fiat money ... also warning of the risk of "fire sales" of the assets backing stablecoins if they collapse, as TerraUSD (UST) and the cryptocurrency LUNA did in 2022.
Poster's Note : Anatomy of a Stablecoin’s failure: The Terra-Luna case (https://www.sciencedirect.com/science/article/abs/pii/S1544612322005359)
There is also the concern around who controls stablecoins...You will always have the question about the quality of the asset backing. Is the money really there? Where is it?
The BIS wants central banks to go down the route of tokenised "unified ledger" incorporating central bank reserves, commercial bank deposits and government bonds.
It would mean central bank money remains both the primary means of global payment and that currencies and bonds from around the world could effectively be integrated into the same "programmable platform".
Tokenisation is aimed at creating a digitalised central bank system that settles payments and securities trades almost instantaneously and more cheaply by cutting the need for certain time consuming checks, as well opening up new functionality.
It can also make the system more transparent, resilient and interoperable and may protect the system from some of the more unpredictable elements of cryptocurrencies...]
-------------------------
From https://corporatefinanceinstitute.com/resources/cryptocurrency/what-happened-to-terra/
Title : What Happened to Terra?
Written by CFI Team , reviewed by Andrew Loo
[Over the course of a week’s time in 2022, the collapse of stablecoin Terra and its sister token, Luna, wiped out almost an estimated half-a-trillion USD from the cryptocurrency markets. So what is Terra and how did this happen...
in May of 2022, Terra experienced the cryptocurrency equivalent of a bank run, where depositors lost confidence in the tokens and all raced for the door at the same time. By May 16, the Terra stablecoin and Luna token were all but dead, with some media outlets calling it a Ponzi scheme while others were calling it a rug-pull scam ...]
