Impact of Stablecoins on International Monetary System

This technical report examines the impact of stablecoins on the international monetary and financial system, particularly focusing on emerging market and developing economies (EMDEs). It outlines how stablecoins, which are digital tokens designed to maintain a stable value relative to a reference asset, could influence the roles of currencies in the global economy. The report discusses three scenarios for stablecoin adoption: niche adoption, where stablecoins remain within cryptocurrency ecosystems; digital dollarisation, which poses risks to monetary sovereignty in EMDEs; and domestic stablecoin integration, which could enhance efficiency while maintaining policy autonomy. The analysis highlights that approximately 98% of stablecoins are dollar-denominated, suggesting they may reinforce existing currency hierarchies. The report further details the potential benefits and challenges posed by stablecoins, including their role in cross-border payments and financial inclusion, as well as the risks of eroding monetary sovereignty and creating financial instability.