BIS Report Compliance Observation: The Real Risks of Stablecoins, Not Just "Depegging"

Core Viewpoint

1. BIS is not against technology, but is asking: Where does trust come from?

BIS acknowledges that stablecoins and tokenization do bring some efficiency improvements, such as faster payments, programmable payments, atomic settlements, and less reconciliation friction. The report also points out that DLT and tokenization can place assets and funds on programmable ledgers, supporting automation and round-the-clock operations.

But BIS's core point is:

Money is not merely a technological product.

Money becomes money not just because it can be transferred, but because there is a set of institutional arrangements behind it:

There is a common unit of account,

There is certainty of redemption at face value,

There is liquidity support,

There is a regulatory and legal framework,

And there are requirements for financial integrity.

This is crucial for compliance professionals.

Because any new payment tool, once it enters large-scale usage scenarios, will ultimately face the same questions:

Who identifies the customer? Who monitors transactions? Who handles anomalies? Who bears responsibility?

2. The compliance risks of stablecoins are not just on-chain anonymity

When many people talk about the risks of stablecoins, their first reaction is "on-chain anonymity" and "wallets are hard to trace."

But the BIS report discusses this more systematically.

In the traditional financial system, banks and regulated institutions are responsible for customer identification, transaction monitoring, suspicious activity reporting, and stopping or reversing payments when necessary. In contrast, stablecoins primarily circulate on public, permissionless blockchains, where pseudonymity, non-custodial wallets, cross-chain bridges, and mixing tools can all weaken KYC and AML/CFT controls.

This means that stablecoins do not present a single point of risk, but rather a set of combined risks:

Who the customer is may not be clear;

Where the funds come from may not be complete;

What the purpose of the transaction is may not be explainable;

After cross-chain, the path may be fragmented;

If problems arise, the responsible party may also be unclear.

Therefore, for compliance departments, it is not enough to just ask:

"Is there a risk with this address?"

They should also ask:

Why does this customer want to use stablecoins?

How do funds move in and out between stablecoin and fiat accounts?

Who is the counterparty?

What is the relationship between wallets, trading platforms, and payment institutions?

Does the funding path align with the customer's background and business model?

3. On-chain transparency does not equal compliance transparency

Supporters of stablecoins often say: On-chain transactions are public, so they are more transparent.

This statement is only half true.

On-chain data is indeed visible, but "address visibility" does not equal "identity visibility."

"Transaction path visibility" also does not equal "transaction purpose clarity."

BIS also mentions that blockchain analysis companies are already supporting law enforcement, and some stablecoin issuers have frozen specific on-chain addresses, indicating that on-chain technology does indeed help with risk identification.

However, BIS emphasizes that these measures cannot replace routine, large-scale AML/CFT controls.

True compliance is not about buying a tool, but about establishing a closed loop:

Before customer onboarding, can virtual asset exposure be identified?

When a transaction occurs, can on-chain and off-chain fund flows be monitored?

After hitting a risk, can manual review and explanation be conducted?

After forming suspicious leads, can traces be left, escalated, and reported?

After model and rule adjustments, can they be audited and reviewed?

Technology is just one link in the compliance chain, not compliance itself.

4. Stablecoins will bring "on-chain risks" back to traditional finance

The BIS report mentions that as of the end of May 2026, the market value of stablecoins was approximately $320 billion; the estimated annual transaction volume of stablecoins in 2025 was about $28 trillion, but after excluding transfers between wallets of the same entity, the actual economic significance would be much lower.

These figures indicate one thing:

Stablecoins are large enough to not be ignored by compliance departments;

But they are not mature enough to completely replace the existing financial system.

More importantly, the risks of stablecoins will not remain on-chain.

They will re-enter traditional financial institutions through the movement of funds, trading platforms, payment institutions, trade scenarios, cross-border settlements, and customer accounts.

For example:

Customers frequently deposit funds into virtual asset platforms using bank accounts;

Corporate clients claim to engage in cross-border trade, but funds ultimately flow into stablecoin channels;

Personal customer accounts show large amounts of incoming transfers from strangers followed by concentrated purchases of virtual assets;

Customers explain it as "investment," "settlement," or "currency exchange," but the transaction behavior and income sources do not match.

These scenarios are fundamentally not just "virtual asset issues," but rather customer due diligence and transaction monitoring issues that traditional financial institutions must face.

5. Future regulatory direction: not to ban innovation, but to "embed the rules"

BIS proposes a very important direction:

Future tokenized finance should not detach from the existing trust system, but should integrate tokenization technology into a two-tier monetary system based on central bank currencies and regulated institutions. From a compliance perspective, this can be summarized in four words: rules in advance. The future more feasible digital financial infrastructure should embed in the transaction process: customer identity verification,

transaction pre-screening,

risk rule assessment,

auditable data trails,

privacy and data sovereignty protection, and cross-institutional, cross-jurisdictional collaboration mechanisms. BIS also clearly states that platforms with licensing mechanisms that can embed AML/CFT pre-screening, list screening, and auditable data trails into the transaction process are more likely to maintain financial integrity in large-scale scenarios. This is also where compliance technology will truly add value in the future: not in post-event remediation, but in embedding risk control into the process before payments and settlements occur.

compliance Xiaobai Observations

The insight from this BIS report for compliance professionals is not about "whether stablecoins are good or bad," but rather:

All new financial tools in the future, if they want to become mainstream payment and settlement tools, must answer compliance questions.

Who will identify the customer?

Who will monitor transactions?

Who will handle anomalies?

Who will bear responsibility?

Who will ensure consistency in cross-border rules?

If these questions do not have answers, no matter how advanced the technology, it merely shifts the risk to harder-to-regulate places.

Therefore, from a compliance perspective, stablecoins are not just a "crypto topic."

They will affect bank account monitoring, payment institution risk control, cross-border fund flows, virtual asset access, customer risk ratings, and financial crime prevention.

The truly valuable direction in the future is not to use technology to bypass compliance,

But to embed compliance capabilities into technological infrastructure.

Compliance is not the opposite of innovation.

Compliance is the infrastructure that determines whether financial innovation can go far.

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