A recent assessment from the International Monetary Fund signals rising concern that USD-pegged stablecoins could intensify financial vulnerabilities in emerging markets. The institution argues that rapid access to digital dollars may weaken local currencies and complicate efforts to manage macro-financial stability.
The report cautions that stablecoins can enable capital movement outside regulated financial channels, creating paths that bypass traditional intermediaries. In markets already battling high inflation or unstable exchange rates, this opens the possibility of currency substitution, where households and businesses migrate from domestic money to digital dollar tokens.
The IMF notes that stablecoins could undermine capital flow management tools by allowing funds to shift quickly and discreetly across borders. Such features, the report says mirror historical episodes when emerging markets faced abrupt capital flight during global shocks. The hypothetical impact during events like the 2013 taper tantrum illustrates how fast digital transfers might have accelerated outflows.
Still, analysts maintain that the danger remains limited for now. Despite expanding to nearly $300 billion, stablecoins are used primarily as liquidity instruments for crypto trading, not as mainstream transaction currencies.
Experts says that the size of the stablecoin market is negligible compared with global dollar activity, with the U.S. money supply measured in the tens of trillions. They add that newer regulatory frameworks, including updated U.S. payment-token rules, are not yet active and are unlikely to alter behavior in countries where authorities already restrict stablecoin usage.
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