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Stablecoin growth - policy challenges and approaches

Author

Listed:
  • Iñaki Aldasoro
  • Matteo Aquilina
  • Ulf Lewrick
  • Sang Hyuk Lim

Abstract

Stablecoins' linkages with the traditional financial system are growing, which raises policy challenges ranging from preserving financial integrity to mitigating financial stability risks. Broader use of foreign currency-denominated stablecoins could raise concerns about monetary sovereignty and, in some jurisdictions, erode the effectiveness of existing foreign exchange regulations. The principle of "same risks, same regulation" faces limitations in the context of stablecoins, highlighting the need for tailored regulatory approaches that address the nature and specific features of stablecoins.

Suggested Citation

  • Iñaki Aldasoro & Matteo Aquilina & Ulf Lewrick & Sang Hyuk Lim, 2025. "Stablecoin growth - policy challenges and approaches," BIS Bulletins 108, Bank for International Settlements.
    • Handle: RePEc:bis:bisblt:108
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    References listed on IDEAS

    as
    1. Matteo Aquilina & Jon Frost & Andreas Schrimpf, 2024. "Decentralized Finance (DeFi): A Functional Approach," Journal of Financial Regulation, Oxford University Press, vol. 10(1), pages 1-27.
    2. Aldasoro, Iñaki & Cornelli, Giulio & Ferrari Minesso, Massimo & Gambacorta, Leonardo & Habib, Maurizio Michael, 2025. "Stablecoins, money market funds and monetary policy," Economics Letters, Elsevier, vol. 247(C).
    3. Iñaki Aldasoro & Sebastian Doerr, 2023. "Who borrows from money market funds?," BIS Quarterly Review, Bank for International Settlements, December.
    4. Anneke Kosse & Marc Glowka & Ilaria Mattei & Tara Rice, 2023. "Will the real stablecoin please stand up?," BIS Papers, Bank for International Settlements, number 141, November.
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    Cited by:

    1. Hongzhe Wen & R. S. M. Lau, 2025. "A Risk Mitigation Model of Monetary Ecosystem with Stablecoins," Papers 2510.10469, arXiv.org.

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