The International Monetary Fund (IMF) has warned that the rapid rise in the acceptance of stablecoins, despite enhancing individuals’ access to financial services, could undermine central banks’ monetary policies and control. Stablecoins are digital currencies typically pegged to stable assets like the US dollar or gold, offering stability within the cryptocurrency market. According to the IMF, widespread use of stablecoins may disrupt traditional financial systems as they operate independently of central bank intervention, potentially impacting monetary policies crucial for a country’s economic stability. Over recent years, stablecoins have surged in popularity, especially in digital payments and international transactions, providing financial services to those lacking access to traditional banking. However, this growth has also raised concerns regarding transparency and regulatory oversight. The IMF emphasized the need for governments and financial institutions to establish effective regulations to manage stablecoin usage and maintain financial stability. Without such measures, the expansion of this new financial trend could introduce uncertainties harmful to the global economy. Given the increasing prominence of stablecoins, financial authorities must adopt balanced strategies to promote digital financial innovation while mitigating risks. Future containment will require international cooperation to ensure financial stability and consumer protection.
Source: decrypt
