The IMF on stablecoins: “risks abound”

Yesterday the International Monetary Fund (IMF) published an article debating the effects of stablecoins on global finance. In the first of a series of two posts on the subject, the institution puts forward multiple risks of international digital coins like Facebook’s cryptocurrency, Libra. The authors, Tobias Adrian and Tommaso Mancini Griffoli, also wrote a July report on digital money. However, this article looks to be motivated by discussions on Libra. It comes just a few days after the European Central Bank’s Benoît Coeuré made a speech on stablecoins.

The benefits for users

We have covered many projects which aim to use blockchain technology for fast, cheap cross border payments. Stablecoins have much the same appeal, as the IMF explained yesterday. “Low costs, global reach, and speed are all huge potential benefits,” the article reads. Indeed, digital currencies are hailed as being more accessible and efficient to use. The Fund also mentions “seamless payments of blockchain-based assets” through stablecoins. Their digital architecture is more open than conventional banking systems, hence can be more easily used in third party applications.

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