🚨 According to a new 56-page report by the IMF, stablecoins could weaken the monetary policy of many countries.
This is because they can penetrate an economy very quickly, simply via the internet and smartphones.
The World Bank even refers to "monetary substitution," with citizens in some countries starting to use USD stablecoins to the detriment of their own currency.
Usage is exploding in Africa, the Middle East, and Latin America, where populations are seeking a local alternative that is more stable than their national currency.
If a large part of economic activity is conducted using foreign stablecoins, central banks lose control over interest rates, liquidity, and their monetary sovereignty.
The IMF warns that CBDCs may struggle to compete if stablecoins first gain traction through non-custodial apps and services.
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