Anchoring trust in money: innovation beyond stablecoins
Speech by Mr Frank Smets, Acting Head of Monetary and Economic Department and Head of Economic Analysis and Statistics, on the occasion of the Bank's Annual General Meeting, Basel, 28 June 2026.
The monetary system is rapidly changing as digital innovation is reshaping the payments landscape, raising the question of how to preserve trust in money. Today's two-tier system, anchored in central bank money and sound institutions, has delivered that trust, ensuring money's singleness, elasticity and financial integrity. Stablecoins have emerged as new tokenised money-like instruments. Yet today's stablecoins feature weaknesses, such as deviations from par and fragmentation, and pose risks to financial integrity. Widespread stablecoin adoption could affect bank funding, credit provision, fiscal space and monetary policy. Risks include fire sales in money markets, capital flow volatility and liquidity strains. Cross-border use could spur dollarisation in some economies. Policy recommendations focus on two tracks: tighten safeguards around stablecoins and integrate tokenisation into the two-tier system anchored in central bank money.
