you are currently viewing::Understanding StablecoinsDecember 4, 2025-Stablecoins, a type of crypto asset, have seen significant growth and attention recently. This paper provides a comprehensive overview of stablecoins. It discusses market developments, use cases, potential benefits, associated risks, and the evolving international regulatory landscape. Stablecoin issuance has doubled over the past two years, driven by their use in crypto trades. The future demand for stablecoins could arise from other use cases supported by enabling legal and regulatory frameworks. Stablecoins are part of the broader interest in asset tokenization. Stablecoins offer several potential benefits. Through tokenization, they could increase efficiency in payments through increased competition. Stablecoins also carry significant risks related to macro-financial stability, operational efficiency, financial integrity, and legal certainty. Stablecoins may contribute to currency substitution, increase capital flow volatility. These risks could be more pronounced in countries experiencing high inflation, weaker institutions, or diminished confidence in the domestic monetary framework. The regulatory landscape for stablecoins is evolving. Source: imf.org |
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