BIS Calls for Global Coordination on Stablecoin Rules

In Short

The Bank for International Settlements is urging global coordination on stablecoin rules, warning that mismatched regulation could fragment markets and increase the risk of stablecoin runs causing financial stress.

What Happened

The Bank for International Settlements, often called the central bankers’ central bank, renewed its warning on stablecoins, which are crypto tokens designed to track a currency like the US dollar (similar to a digital dollar coupon).

BIS general manager Pablo Hernandez de Cos said international cooperation is “critically important” because stablecoins can affect monetary policy, fiscal policy, and efforts to stop illicit finance. Business Day reported his remarks from a speech delivered in Japan.

A key concern is regulatory fragmentation. If countries write very different rules, stablecoin issuers and crypto firms may shift activity to the easiest jurisdiction, a practice regulators call “regulatory arbitrage” (shopping for the lightest rulebook).

De Cos also warned that “runs” on stablecoins can trigger market stress. A run is when many holders try to redeem at once, like a bank run, and the issuer struggles to meet withdrawals.

He said the run risk could be reduced if stablecoin issuers had something like deposit insurance or access to central bank lending facilities. Those are backstops that traditional banks rely on in a crisis.

De Cos added that the largest issuers, including Tether and Circle, can behave more like securities than money due to “redemption frictions” that cause prices to drift from the intended 1:1 peg.

Why It Matters

For African fintechs, stablecoins are increasingly part of cross-border payments and crypto on and off-ramps, meaning regulatory clarity shapes product design and partnerships.

Business Day recently reported that VALR partnered with Onafriq to expand crypto exchange on and off-ramps and payments reach across Africa. Moves like this sit directly in the path of new stablecoin rules.

If major markets tighten standards while others lag, African platforms may face higher compliance costs, restricted banking access, and uneven user protections across countries. More aligned rules could lower uncertainty, but they may also raise the bar for reserves, redemptions, and reporting.