According to PANews, the International Monetary Fund (IMF) has released a report titled 'Understanding Stablecoins,' which reveals the rapid penetration of dollar-dominated stablecoins in emerging markets and developing economies. This trend may undermine central banks' control over domestic liquidity and interest rates. The report highlights that stablecoins can quickly enter markets via mobile phones and the internet, particularly in scenarios involving unhosted wallets, leading to potential 'currency substitution.' This phenomenon could weaken the use of local currencies and affect the transmission of monetary policy and seigniorage revenue.
The IMF recommends that countries establish legal frameworks to prevent stablecoins from achieving 'legal tender' or 'official currency' status, thereby safeguarding financial sovereignty. Currently, 97% of the total market value of stablecoins is pegged to the U.S. dollar, with only a small proportion linked to the euro or yen. The report also emphasizes the rising use of stablecoins in cross-border payments and in countries experiencing high inflation, notably in regions such as Africa, the Middle East, and Latin America.
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