BIS warns stablecoins are more like ETFs than actual money, and they're creating FX risk

The crypto industry has long pitched stablecoins, tokens pegged to fiat currencies, as the future of blockchain-based money and payments. But the Bank for International Settlements (BIS) latest annual report is throwing cold water on that narrative.　　The report argued that stablecoins are acting less like money and more like exchange-traded funds (ETFs) or other alternative investment vehicles, whose units allow traders to gain exposure to a wide range of assets held by the fund.　　The hallmark of true money is that it is accepted as a means of payment “with no questions asked.” When you pay with dollars at the grocery store, malls, airports, hotels, or just about anywhere, nobody questions its legitimacy or its value. Whether its a physical bill or a bank deposit, its expected to be worth exactly its face value.　　Secondary-market prices of tokenized versions of fiat currencies deviate from par, though mostly moderately. In other words, the token doesnt always trade at exactly $1. Thats just like an ETF, which typically trades at a slight premium or discount to the funds net asset value.　　Redemptions also arent as smooth as widely perceived, meaning investors converting a stablecoin back to cash may not always get an instant, guaranteed exchange