The International Monetary Fund (IMF) has warned that stablecoins could undermine monetary sovereignty, expressing concerns about dollarization since 97% of stablecoins are currently pegged to the US dollar.



🔸 Stablecoins have doubled in size over the past 2 years, mainly due to their widespread use in crypto trading. In the future, they could also be used for payments if countries establish clear regulatory frameworks.

🔸 In addition to risks such as money laundering or technical failures, there is another serious risk—dollarization.

🔸 Stablecoins can spread rapidly through mobile phones and e-wallets, making it easy for people to switch from using local currency to stablecoins, which could undermine central banks’ ability to control interest rates and money supply.

🔸 The IMF is calling on countries to enact clear laws to prevent stablecoins from becoming “official currency” in order to protect monetary sovereignty.

🔸 About 97% of the total value of stablecoins is pegged to the US dollar, and the use of stablecoins is surging, especially in places with high inflation such as Africa, the Middle East, and Latin America.
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