Finance

Stablecoins could put competitive pressure on monetary frameworks, IMF official says at Davos

Some analysts have raised concerns that ⁠the growth of dollar-backed ‌stablecoins could suck deposits out of banks in emerging ‌economies.

 The IMF’s first deputy managing director ‍said ‍on Thursday that ​the uptake of stablecoins in ⁠some countries could put pressure on those ⁠countries to ‌improve their fiscal and monetary frameworks.

“As stablecoins create ⁠the potential for additional uptake in, you know, jurisdictions that have weak fiscal ⁠and monetary frameworks for ​dollars, or for other currencies, that creates ‍a competitive pressure on those ​countries themselves in order to improve their fiscal and monetary frameworks,” Dan Katz, the International Monetary Fund’s number two official, said on a panel at Davos.

Some analysts have raised concerns that ⁠the growth of dollar-backed ‌stablecoins could suck deposits out of banks in emerging ‌economies.

© ZAWYA 

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