BIS Says Stablecoins Will Buy More Commercial Paper
Posted on 10/04/2023
The Bank For International Settlements (BIS) says stablecoin issuers are another new class of investor and were “material holders of short-term paper in 2021.” The BIS says the stablecoin market held US$ 65 billion in commercial paper at its height “when crypto markets boomed,” but that number has since fallen.
Things began to turn for the worst “when various high-profile collapses rocked crypto markets, and as yields on safer government bills increased.” However, the BIS is expecting investments in commercial paper to ramp up due to individual companies forming their own stablecoins.
The BIS plans to keep a close eye on the situation: “This technological sea change is transforming the financial sector and the wider economy, affecting all aspects of our work – from payments to monetary policy to financial regulation. Central banks have a responsibility to be at the vanguard of the intensifying debates about the nature of money in a digital world and how new players will reshape the financial services landscape and the financial system more broadly.”
