BIS: The next-generation monetary and financial system should balance stability and innovation while preserving trust in money

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BIS said the next-generation monetary and financial system should incorporate tokenization technology into a two-tier financial system underpinned by central and commercial banks, while addressing weaknesses in existing stablecoin architectures. BIS noted that current stablecoin designs have shortcomings in the singleness of money, redeemability, and interoperability across ledgers, while widespread adoption could also affect bank funding, credit supply, and financial stability. The report proposed using a unified ledger to integrate different forms of tokenized money, and presented Project Agorá as a cross-border wholesale payments prototype involving eight central banks and more than 40 regulated institutions.