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IMF Flags Stablecoin Growth as Threat to Monetary

IMF Flags Stablecoin Growth as Threat to Monetary Stability in Vulnerable Economies

The International Monetary Fund cautioned that the rapid rise of stablecoins, particularly dollar-linked tokens, could threaten national monetary control.

Its latest report highlights that this trend may severely impact countries already struggling with inflation or weak confidence in domestic institutions.

Rising Concerns Over Currency Substitution
According to the IMF, the increasing reliance on stablecoins, particularly those tied to the U.S. dollar, may encourage users to abandon national currencies in favor of digital alternatives. This trend, the report explains, could weaken central banks’ ability to manage capital flows and preserve monetary stability.IMF noted that such substitution tends to occur most rapidly in countries where confidence in the currency or institutional framework is already fragile. Consequently, these countries are more exposed to external shocks.1000118218

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