According to the IMF, US dollar-backed stablecoins and their cross-border ease could prompt unstable economies to favor them over local currencies, undermining monetary control.
The IMF has cautioned that stablecoins, particularly those backed by the US dollar, could accelerate currency substitution in countries with weak monetary systems. It warns this shift might reduce central banks’ control over capital flows and monetary policy. The convenience of cross-border transactions may encourage unstable economies to adopt stablecoins over domestic currencies.