The Financial Stability Board published a report highlighting the risks affecting emerging economies from foreign currency stablecoins. In countries with unstable currencies and rampant inflation, stablecoins provide an option to park funds elsewhere. Some data may illustrate that emerging market crypto users, such as Argentinians, live day to day using their dollar stablecoins.
However, the FSB’s view is at a bigger picture level. In countries that impose capital controls, stablecoins and crypto provide a way to circumvent these.
Stablecoins are predominantly (99.6%) in U.S. dollars. If a sufficient proportion of the population uses stablecoins, this could threaten the country’s monetary sovereignty, although the FSB doesn’t see that happening yet.
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