The Bank for International Settlements (BIS) has warned that the fast rise of stablecoins and the boom in artificial intelligence investment could create major risks for the global financial system. In its latest Annual Economic Report, the BIS said that more use of private stablecoins might weaken monetary control and split up the international monetary system.
It also cautioned that too much borrowing to fund AI projects could lead to broader financial instability if investor confidence drops. The BIS called on policymakers to improve tokenized banking systems and stay alert to growing risks in both areas.
The report says that even though stablecoins are becoming more popular, they do not have many of the protections needed to work as reliable money on a large scale. The BIS warned that if people and businesses move more deposits from banks to private stablecoins, banks could lose a key source of funding. This could mean less credit is available for the wider economy.
The BIS is especially worried about more people using US dollar-backed stablecoins in countries with weaker local currencies. It says this could make local monetary policy less effective, increase reliance on foreign currencies, and make emerging economies more vulnerable to sudden changes in capital flows.
The BIS suggests using a “unified ledger” system instead of private stablecoins. This system would bring together tokenized central bank money, commercial bank deposits, and financial assets within a regulated framework. The BIS also repeated its concerns that public blockchains have problems with governance, scalability, and accountability when used for large-scale finance.
The BIS is also worried about how quickly companies are investing in AI. It pointed out that the biggest tech firms are expected to spend over $1 trillion on AI between 2025 and 2026, with investment growing faster than earnings. The report warned that high company values and more borrowing in the AI sector could make financial risks worse if market sentiment suddenly shifts.
An artificial-intelligence bust, inflation and fiscal stress are among the most alarming threats to global prosperity at present, the Bank for International Settlements warned https://t.co/SYcAZuR1XN
— Bloomberg (@business) June 28, 2026
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