Woofun AI reports that the Bank for International Settlements stated in its 2026 annual economic report that current stablecoins fail to meet monetary standards regarding uniqueness, flexibility, interoperability, and integrity. The BIS characterized these assets as similar to ETF shares rather than genuine payment instruments, noting frequent decoupling from underlying assets and significant redemption friction. With a global market capitalization of approximately $320 billion, over 99% of stablecoins are pegged to the US dollar, dominated by USDT and USDC. The BIS model indicates that even if stablecoin scale expands to $1 trillion to $3 trillion, the net impact on economic output would remain mildly negative due to increased bank financing costs and reduced credit supply. The report warns that emerging markets face "dollarization of stablecoins," where residents use USD-pegged tokens for value storage, altering capital flows and eroding monetary sovereignty. The BIS advocates for integrating tokenized central bank reserves, commercial bank money, and regulated private currencies through a "unified ledger" anchored by central bank money.