IMF considered the advantages and disadvantages of implementing stablecoins

 

International Monetary Fund has published a review article describing the pros and cons of using stablecoins.

The authors begin by arguing that the introduction of new digital payment methods can improve efficiency, increase competition, and facilitate access to financial resources and innovation. Noting the rise in popularity of stablecoins and their rapid spread.

What are Stablecoins? What is Tether?

Their strong point is their attractiveness as a means of payment associated with low costs, global reach and speed. In addition, coins can provide uninterrupted payment for assets on the blockchain and, thanks to their open architecture, can be easily integrated into digital applications. The authors consider the most attractive projects that promise to make the transaction as easy as using social networks..

However, the IMF experts also described the potential risks associated with the use of stablecoins. First of all, their proliferation can weaken the position of banks as intermediaries, but does not threaten their existence. Since they can not only compete and offer their own innovations, but also motivate coin issuers to use the banking system.

Another potential threat is the emergence of monopolies due to the monetization of networks of tech giants. To counter them, new standards of protection, control and ownership of user data are needed.

Stablecoins threaten weak currencies in countries with high inflation, which can undermine monetary and fiscal policies and slow economic development. They can also lead to a loss of income for the Central Bank, derived from the difference between the face value of the currency and the cost of issuing money..

IMF considered the advantages and disadvantages of implementing stablecoins

Technology not only simplifies control of the financial system, but also opens up new opportunities for money laundering and terrorist financing. Lack of proper oversight can lead to loss of financial stability for consumers.

Based on these arguments, IMF officials recommend that policymakers develop forward-thinking regulatory regimes that will help shape the world of the future..

This is not the first article by the International Monetary Fund preparing financiers for the changes to come. In a recent report, the authors pointed out that digital currencies and fiat-pegged cryptocurrencies can displace traditional money.

text: Ivan Malichenko, photo: indsamachar

Similar articles