IMF Releases New Blog on the Adoption of Stablecoins
The International Monetary Fund (IMF) recently released a blog, “Digital Currencies: The Rise of Stablecoins” outlining the adoption of new digital payment methods.
The blog written by Tobias Adrian and Tommaso Mancini-Griffoli outlined the benefits and risks that stablecoins may impose on customers and society.
The IMF mentioned that times are changing as Facebook has announced the emergence of Libra, the USD Coin recently launched in 85 countries, and there has been an increase in new stablecoin businesses.
The low costs, global reach, and efficiency are potential benefits emphasized by the IMF. The IMF also stated:
"Stablecoins offer the potential for better integration into our digital lives and are designed by firms that thrive on user-centric design. Large technology firms with enormous global user bases provide a ready-made network over which new payment services can quickly spread."
However, potential risks were also mentioned, including the fact that tech giants could use their own networks to exclude competitors, the promotion of illicit activities through stablecoins, and the potential legal issues stablecoins may run into as to what kind of financial instruments they are backed by.
Lastly, the blog stated that stablecoins present as many risks as they do potential benefits, and that regulators will need time to meet the challenge of the rise of stablecoins. The IMF added that there would be a part 2 covering digital currencies in their next blog.