IMF says local-currency stablecoins could speed up use of dollar tokens

The International Monetary Fund said local-currency stablecoins may end up helping the spread of U.S. dollar-pegged stablecoins when both circulate on the same blockchain infrastructure. Dan Katz, the IMF’s first deputy managing director, said users in that setup can move between local-currency and dollar stablecoins through decentralized exchanges, liquidity pools, or peer-to-peer transfers. He said that convenience could support broader use of dollar stablecoins rather than contain it. Katz added that users may prefer dollar stablecoins because of their liquidity, network effects, and wider acceptance across platforms and across borders. He also pointed to South Africa as an example, saying adoption of dollar stablecoins there remains limited, while demand for rand-linked stablecoins is even lower. Katz urged regulators to bring fiat on- and off-ramps, along with on-chain transaction venues, into their regulatory frameworks.