Quick answer: In its 2026 Annual Economic Report, the Bank for International Settlements argues that stablecoins fail three core tests of sound money (singleness, elasticity, and integrity) and that tokenisation should be built into the existing two-tier monetary system anchored by central banks, not around it. At the same time, Japan’s regulator approved Ripple’s RLUSD stablecoin for its market. Together they show tokenisation moving from concept into regulated market structure, from two different directions.
Updated 07/17/2026. By Jake Claver. Educational content, not investment advice.
Two developments landed close together and pull in interesting tension. The BIS, the central bank for central banks, published a skeptical assessment of stablecoins while making the case for tokenisation done its way. Japan, one of the world’s most demanding financial regulators, brought a specific private stablecoin inside its rulebook. Reading them side by side is the clearest recent picture of where regulated tokenisation is heading. This is an infrastructure and policy story, not a signal about any token.
What the two-tier monetary system is
Today’s money runs on two tiers. The first is central bank money: reserves and cash that sit at the base of the system. The second is regulated private money, mainly commercial bank deposits, that the public actually uses day to day. The BIS Annual Economic Report 2026 frames central banks as enabling three things that hold the whole structure together: they stabilise the unit of account, guarantee settlement at par, and supply elastic liquidity when the system needs it. Private money works because it can always be exchanged one-for-one with central bank money.
The three tests the BIS says stablecoins fail
The report measures stablecoins against the properties of money and finds three gaps:
- Singleness. Money should trade at par no matter who issued it. Stablecoins, the BIS argues, cannot currently guarantee par exchange across different issuers and blockchains under all conditions.
- Elasticity. A monetary system needs to expand and contract with demand. Stablecoins are constrained by a cash-in-advance issuance model and by the depth of their reserve assets, so they cannot flex the way bank money does.
- Integrity. Because many stablecoins circulate on permissionless networks with pseudonymous, unhosted wallets, the report ties them to a meaningful share of illicit on-chain activity and weaker anti-money-laundering compliance.
The accompanying BIS press release puts it bluntly: stablecoins show promise for faster payments, but in their current form fall short on key properties of money and carry structural flaws. Rather than reject tokenisation, the BIS points to a unified ledger anchored in tokenised central bank reserves, with regulated private monies on top, and cites Project Agorá as a prototype of a shared platform for cross-border payments. These stablecoin concerns echo earlier official work, including the U.S. Treasury-led President’s Working Group stablecoin report and the Financial Stability Board’s high-level recommendations, which apply oversight on a functional basis proportionate to risk and require redemption at par.
Japan takes the opposite-looking step
While the BIS argues about how stablecoins should fit into the system, Japan just fit one in. On June 24, 2026, Ripple and SBI Group announced the launch of Ripple USD (RLUSD) in Japan, offered to institutional and retail users through SBI VC Trade’s VCTRADE platform. The launch received approval from Japan’s Financial Services Agency, which categorised RLUSD as a new type of electronic payment instrument under Japan’s Payment Services Act, a route built for foreign-issued stablecoins that meet Japanese standards. RLUSD is a USD-backed stablecoin that launched in late 2024 and, per Ripple, has reached about $1.7 billion in market capitalisation. That is a stated figure, not a forecast.
The contrast is the point. Japan did not wave a stablecoin through unregulated; it brought RLUSD inside a licensing regime with reserve, redemption, and compliance conditions. That is closer to the BIS vision of regulated private money than to the permissionless model the BIS criticises.
What the source shows
Why this matters for market infrastructure
Cross-border payment and settlement is where tokenisation gets tested against real regulation, a theme the BIS CPMI work on stablecoins in cross-border payments and Japan’s own FSA framework both address. When a stablecoin has to satisfy reserve rules, par redemption, and AML checks to operate, it stops being a speculative instrument and starts being payment infrastructure. That is the shift both stories describe: tokenised value moving into regulated rails. One honest caveat: the BIS did not endorse RLUSD or any private token. In fact the BIS report is critical of stablecoins as currently designed. Japan’s approval is a national regulatory decision about one issuer, not a global blessing. Nothing here favors XRP, RLUSD, or any asset as an investment.
Common questions
What is the two-tier monetary system?
It is the structure of modern money: central bank money (reserves and cash) at the base, and regulated private money (mainly commercial bank deposits) on top. Private money works because it can always be exchanged at par for central bank money, and central banks stabilise the unit of account, guarantee settlement, and supply elastic liquidity.
Why does the BIS criticize stablecoins?
The BIS Annual Economic Report 2026 says stablecoins fail three tests of sound money: singleness (no guaranteed par exchange across issuers and chains), elasticity (a cash-in-advance model limits supply), and integrity (permissionless circulation is linked to illicit activity and weaker AML). It favors tokenisation built on central bank money instead.
Did the BIS endorse RLUSD?
No. The BIS did not endorse RLUSD or any private token. Its report is skeptical of stablecoins as currently designed. The RLUSD news is a separate development: a national regulatory approval in Japan, not a BIS endorsement.
What did Japan approve for RLUSD?
Japan’s Financial Services Agency approved RLUSD, launched by Ripple with SBI Group via SBI VC Trade, as a new type of electronic payment instrument under Japan’s Payment Services Act. The June 24, 2026 launch made it available to institutional and retail users under Japanese regulatory conditions.
Is this a reason to buy a stablecoin or crypto token?
No. This is a policy and infrastructure story about how tokenised money is being regulated. It is not investment advice and does not recommend any stablecoin or token.
This content is educational only. It is not tax, legal, or investment advice. Check primary sources and speak with a qualified professional before making financial decisions.
