Global stablecoin rules stall as BIS warns risks

Bank for International Settlements has warned that stalled progress on global stablecoin standards risks creating fragmented regulation that could amplify market instability.

The caution follows comments from Andrew Bailey, who said international rulemaking has slowed, raising concerns about gaps in oversight across jurisdictions.

Without coordinated rules, firms may exploit regulatory arbitrage by shifting operations to regions with weaker oversight, according to BIS General Manager Pablo Hernández de Cos.

The stablecoin sector has grown to around $320 billion, dominated by Tether and USD Coin, with policymakers warning that redemption risks could cause price deviations from their $1 peg.

To address these risks, regulators are considering measures such as limiting interest payments on stablecoins and allowing issuers access to central bank liquidity backstops.

In the U.S., lawmakers are advancing the Digital Asset Market Clarity Act, with negotiations ongoing around stablecoin yield provisions and broader oversight frameworks.

Officials say global coordination remains critical to ensuring stability as the sector expands, while unresolved regulatory differences could shape how stablecoin markets evolve across regions.