A senior official at the International Monetary Fund (IMF) argues that the rapid development of stablecoins could force many countries, particularly emerging economies, to upgrade and strengthen their monetary policy frameworks if they want to avoid the risk of financial instability.
Speaking on the sidelines of the World Economic Forum (WEF) in Davos, the IMF's First Deputy Managing Director stated that stablecoins are creating direct competitive pressure on countries with inefficient fiscal and monetary systems. As individuals and businesses gain easier access to price-stable digital payment instruments, the traditional Vai of domestic currencies and banking systems risks weakening.
According to the IMF, the increasing use of stablecoins could lead to a withdrawal of deposits from banks, especially in emerging markets where confidence in the local currency and monetary policy is not yet solid. This would not only reduce the banking system's Capital sources but could also affect the central bank's ability to manage interest rates and liquidation .
IMF officials emphasized that stablecoins are not simply a technological innovation in the payments sector, but are gradually becoming a factor with systemic impact on the global financial structure. The proliferation of stablecoins may force countries to improve fiscal discipline, enhance transparency, and improve the effectiveness of monetary policy if they want to maintain confidence in their domestic currencies.
Recently, the IMF has repeatedly issued warnings regarding stablecoins, ranging from the risks of financial instability and the potential for large-scale stablecoin runs to the ripple effects on banking and government bond markets. However, the organization also acknowledges that, if properly managed, stablecoins could offer benefits in cross-border payments and inclusive finance.
