IMF warns: Stablecoins may accelerate "dollarization" in weaker countries, challenging central bank control

[BlockBeats] On December 5, the International Monetary Fund issued a warning: stablecoins could make things worse for countries whose monetary systems are already unstable.

Their reasoning goes like this—USD-pegged stablecoins are becoming increasingly easy to use, making cross-border transfers faster and more convenient. In regions with unstable economies, people and businesses might stop using their local currencies and start using dollar stablecoins directly. This would make it even harder for central banks to control capital flows.

Simply put, the convenience of stablecoins is challenging traditional monetary sovereignty. For already fragile economies, this trend toward “dollarization” could come faster and more forcefully.