BIS and FSB Stablecoin Reports 2026: Key Findings on Bank Deposits, Monetary Policy and Global Financial Stability

The Bank for International Settlements (BIS) and Financial Stability Board (FSB) released two publications in October 2026 examining stablecoins, banking relationships, cross-border financial vulnerabilities and regulatory monitoring challenges.

The BIS working paper examines the relationship between stablecoin demand and bank deposit rates. The FSB report examines financial stability vulnerabilities associated with global stablecoin arrangements.

Bank for International Settlements (BIS): Stablecoins and Bank Deposits Report: Are Stablecoins and Bank Deposits Substitutes? Publication: 13 October 2026 | BIS Working Paper No. 1382 Authors: Rashad Ahmed and Iñaki Aldasoro Key findings from the BIS research • Stablecoins and bank deposits are partial substitutes: The researchers find evidence that stablecoin demand responds to changes in bank deposit rates. • Higher deposit rates are associated with slower stablecoin growth: The study finds a negative relationship between increases in deposit rates and subsequent stablecoin market-capitalisation growth. • Potential bank funding implications: The paper identifies a mechanism through which wider stablecoin adoption could affect banks' funding conditions and credit intermediation. • Monetary policy transmission: The researchers find that deposit pricing influences stablecoin demand, linking monetary policy transmission to the allocation of funds between banks and stablecoin issuers. • Quantitative findings: Against average ten-week stablecoin growth of approximately 15%, the ordinary least squares (OLS) model estimates a reduction of approximately 3 percentage points following a one-basis-point increase in deposit rates. The instrumental-variable model estimates a reduction of approximately 9 percentage points. • USDC shows stronger substitution effects than USDT: The estimated relationship between deposit rates and stablecoin growth is stronger for USDC, which the researchers associate with its closer connections to US depositors and institutional users. • DeFi lending exposure: Stablecoin balances supplied to decentralised finance lending protocols also show a negative relationship with higher bank deposit rates, even after controlling for DeFi yields. • Traditional banking and stablecoin reserves: The paper discusses the potential benefits and risks of requiring stablecoin issuers to hold some reserves as bank deposits. It identifies the risk of concentrating large uninsured deposits at a limited number of banks. • Regulatory design and remuneration: The researchers identify whether stablecoin issuers can pay returns to holders as a factor influencing competition between stablecoins and bank deposits.

Scope and limitations • The analysis covers weekly US data from January 2019 to June 2025. • The study identifies evidence of substitution between stablecoins and deposits but does not establish that stablecoin growth has already reduced aggregate bank deposits or lending. • The statistical estimates describe changes in stablecoin growth rates, not necessarily outright declines in market capitalisation. • The findings are those of the authors and do not necessarily represent the institutional views of BIS or its member central banks.

Official BIS Report: https://www.bis.org/publications/working-paper-1382-are-stablecoins-and-bank-deposits-substitutes.pdf

Financial Stability Board (FSB): Global Stablecoin Vulnerabilities and Financial Stability Report: Global Stablecoin Arrangements: Cross-border Vulnerabilities and Financial Stability Monitoring Publication: 12 October 2026 Key statistics reported by the FSB • $300 billion: Approximate total stablecoin market value as of mid-2026. • 99%: Share of stablecoin market value pegged to the US dollar. • 24/7: Stablecoins can circulate and trade continuously across international secondary markets.

Key concerns identified by the FSB • Cross-border financial stability vulnerabilities: Global stablecoins operate across jurisdictions and sectors, limiting individual authorities' ability to assess and address certain risks independently. • Currency substitution: The FSB identifies currency substitution as an additional potential vulnerability for emerging market and developing economies. • Bank disintermediation: The report identifies possible banking-sector disintermediation associated with the use of global stablecoins. • Capital-flow management: Global stablecoins may create additional challenges for authorities managing cross-border capital movements. • Systemic importance: The FSB notes that stablecoins may become systemically important at lower levels of adoption in some emerging market and developing economies. • Stablecoin redemption and run risk: Continuous secondary-market trading and slower reserve-market settlement arrangements can create liquidity pressures during periods of market stress. • Reserve asset liquidation: Stablecoin runs could transmit stress to traditional financial markets through reserve-asset sales and banking deposit withdrawals. • Foreign exchange market exposure: The report identifies potential transmission channels involving foreign exchange markets where stablecoins are used for cross-border transactions. • Multi-issuer arrangements: Stablecoins issued through affiliated entities holding separate reserves may face difficulties reallocating liquidity across jurisdictions during periods of concentrated redemption demand. • Legal and insolvency uncertainty: Cross-border structures can make it difficult to establish applicable insolvency arrangements and determine holders' legal claims. • Regulatory arbitrage: Differences between jurisdictions create opportunities for global stablecoin issuers to operate from more lightly regulated or unregulated locations. • Limited information about holders: Stablecoin issuers may not know the identity or geographical location of all holders of their tokens. • Blockchain pseudonymity: The FSB identifies difficulties attributing stablecoin transactions to specific jurisdictions, beneficial holders or economic purposes. • Data reliability and comparability: Authorities rely partly on private blockchain data providers whose methodologies, coverage and transparency may differ. • Monitoring infrastructure: The report highlights the need for sophisticated technical infrastructure, analytical tools and expertise to interpret stablecoin data. • Severe market stress: The FSB notes that global stablecoin arrangements and national regulatory frameworks remain untested under severe stress and insolvency scenarios. Potential benefits identified by the FSB The report also acknowledges that stablecoins may offer: • Faster domestic and cross-border transactions • Lower transaction costs • Greater transparency in certain payment processes • Alternative stores of value in some emerging economies • Financial inclusion opportunities • Improvements in payment and settlement efficiency The FSB notes that some potential benefits may arise from distributed ledger technology and tokenisation rather than stablecoins specifically. Areas identified by the FSB for further work The FSB identifies three areas relating to implementation of its 2023 recommendations: • Enhanced monitoring of cross-border financial stability vulnerabilities and stablecoin data gaps. • Continued implementation of international recommendations through regulatory cooperation and information-sharing. • Collection of information on emerging arrangements for handling distress or failure of global stablecoin arrangements. For stablecoin data monitoring, the FSB additionally identifies the development of consistent monitoring metrics, better use of available information and exploration of data collection best practices. Official FSB Report: https://www.fsb.org/uploads/P121026-2.pdf

Summary of the Two International Publications BIS Working Paper No. 1382 • Identifies stablecoins and bank deposits as partial substitutes. • Documents slower stablecoin growth following increases in bank deposit rates. • Examines potential implications for bank funding and monetary policy transmission. • Finds stronger deposit-rate sensitivity for USDC than USDT. • Discusses how stablecoin reserve requirements and interest payments could affect these relationships. FSB Report, October 2026 • Reports approximately $300 billion in global stablecoin market value as of mid-2026. • Reports that approximately 99% of stablecoin value is pegged to the US dollar. • Identifies currency substitution, bank disintermediation and capital-flow management risks. • Describes cross-border liquidity, redemption, insolvency and regulatory arbitrage vulnerabilities. • Highlights limitations in blockchain transaction attribution, geographical data and financial stability monitoring. The BIS paper uses US data, while the FSB publication examines global cross-border vulnerabilities. Neither report provides a direct empirical assessment of stablecoin use in India or makes India-specific findings concerning the Reserve Bank of India or the Ministry of Finance.

Original Sources Bank for International Settlements — 13 October 2026 Are Stablecoins and Bank Deposits Substitutes? https://www.bis.org/publications/working-paper-1382-are-stablecoins-and-bank-deposits-substitutes.pdf Financial Stability Board — 12 October 2026 Global Stablecoin Arrangements: Cross-border Vulnerabilities and Financial Stability Monitoring https://www.fsb.org/uploads/P121026-2.pdf Published by Digital South Trust | Research and Awareness This article summarises findings contained in the two original publications without providing independent policy opinions or recommendations. The reported figures and findings are drawn from the original documents. BIS-working-paper-1382-are-stablecoins-and-bank-deposits-substitutes.pdf Financial Stability Board on Stablecoins.pdf Financial Stability Board on Stablecoins.pdf