Bank for International Settlements: Stablecoins Could Undermine Emerging Market Capital Controls and Monetary Sovereignty

TechFlow News, July 22, according to Cointelegraph, research by the Bank for International Settlements (BIS) shows that USD-pegged stablecoins are forming a kind of "digital dollarization", with their capital flows in emerging markets being less sensitive to capital controls and foreign exchange restrictions than traditional foreign currency deposits.

The study suggests that stablecoins may enable households and businesses to hold USD assets outside the banking system, thereby undermining monetary sovereignty and posing new challenges to financial stability regulation. Meanwhile, data from the International Monetary Fund (IMF) and the industry shows that the use of stablecoins in cross-border payments, remittances, and asset allocation scenarios in regions such as Nigeria and Latin America continues to grow.