According to The Block, the Bank for International Settlements (BIS) pointed out in its annual economic report that stablecoins still lack key currency attributes such as singularity, elasticity, interoperability, and integrity. Prices deviate from anchoring in the secondary market and there is friction in redemptions, making them more like ETF shares rather than payment methods. The report estimates that when the market value of stablecoins reaches $1 trillion to $3 trillion, the net impact on economic output will be minimal, and it may suppress credit by pushing up bank financing costs. The Bank for International Settlements warns emerging markets of the risk of stablecoin dollarization, as residents holding US dollar stablecoins will weaken local currency sovereignty. Currently, about 99% of fiat currency reserves are anchored in the US dollar, with USDT and USDC dominating, and a total market value of approximately $320 billion.
