BIS warns cryptocurrency exchanges are becoming ‘shadow banks,’ and why that's a risk

The Bank for International Settlements (BIS) released a study informing stablecoin yields and different DeFi “earn” products are bank-like services without the safeguards oregon insurance.

Apr 23, 2026, 2:35 p.m.

Crypto exchanges are progressively offering bank-like services specified arsenic lending and output products, but without the extortion accepted fiscal institutions provide, according to a report issued Thursday by the Bank for International Settlements (BIS).

“What looks similar a high-yield savings merchandise is, successful reality, an unsecured indebtedness to a lightly regulated shadiness bank,” said the report, which does not needfully bespeak the views of the BIS, an planetary fiscal instauration owned by 63 cardinal banks from astir the world.

The 38-page study besides noted that the crypto industry’s largest participants person evolved beyond elemental trading platforms into what it described arsenic “multifunction cryptoasset intermediaries,” bundling services that would typically beryllium separated crossed banks, brokers and exchanges.

The authors said the biggest interest is however accelerated “earn” and output products are growing, and that they are wide marketed to retail users arsenic tools to make passive income connected their crypto assets. While these offerings often committedness charismatic returns, their operation is person to unsecured lending than savings, the study said.

“These platforms are efficaciously taking deposits and recycling them into risky activities — but without the safeguards that marque accepted banking stable."

In galore cases, crypto speech users relinquish power and, sometimes adjacent ownership, of their integer assets to the platform, which past uses the funds for lending, trading oregon market-making strategies. The returns paid to customers are a stock of the profits generated from these activities.

While these arrangements are akin to slope deposits, they deficiency the security accepted concern offers. There whitethorn besides beryllium a deficiency of transparency connected however the assets are used.

“From the customer’s perspective, these products are mostly an unsecured assertion connected the intermediary,” the study said, informing that users are exposed to the platform’s solvency successful the lawsuit of losses.

The BIS pointed to the collapse of Celsius Network and FTX arsenic examples of however users are exposed and victims of the weaknesses it says are inactive rampant wrong the industry.

“What unraveled astatine Celsius and FTX wasn’t conscionable mediocre management, it was a strategy built connected leverage, opacity and deposit-like promises without protection,” the study said.

The study cited the flash clang of October 2025, which triggered an estimated $19 billion successful forced liquidations crossed crypto derivatives markets, saying the descent highlighted however rapidly these dynamics tin spiral.