Researchers at the Bank for International Settlements have found that U.S. dollar stablecoins are creating a new form of “digital dollarization,” according to Cointelegraph. Their analysis covered inflows into foreign-currency deposits and dollar stablecoins across more than 130 economies. Both tend to rise during periods of macroeconomic stress, the researchers said, but stablecoin flows showed little to no response to capital controls or foreign-exchange restrictions. The BIS said this may be because stablecoins operate at least partly outside the traditional regulatory perimeter. The finding points to a tougher policy challenge for emerging markets, where governments may find these assets harder to control than conventional foreign-currency deposits. The BIS added that stablecoins could weaken monetary sovereignty and said policymakers may need new tools to address the financial stability risks tied to their growing use.
ChainCatcher reported, citing Cointelegraph, that researchers at the Bank for International Settlements (BIS) have found U.S. dollar stablecoins are giving rise to a new form of “digital dollarization.” The study said these assets appear largely insensitive to capital controls in emerging markets, making them harder for governments to manage than traditional foreign-currency deposits.
The researchers analyzed inflow data for foreign-currency deposits and dollar stablecoins across more than 130 economies. They found that both increase during periods of macroeconomic stress. Dollar stablecoin flows, however, showed almost no response to capital controls or foreign-exchange restrictions, which the report said may be because they operate “partly outside the regulatory perimeter.”
The BIS said stablecoins could weaken monetary sovereignty and that policymakers need new tools to deal with the financial stability risks linked to these assets.
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