Amid intensified international focus on stablecoins, the International Monetary Fund (IMF) has released a 56-page report detailing what it sees as the main risks associated with their adoption.
The report draws parallels from the claims made by many other central banks and international financial organizations regarding the threat stablecoins represent to government monetary control, ultimately arguing in favor of Central Bank Digital Currency (CBDC).
“Currency substitution facilitated by stablecoin adoption would affect monetary sovereignty, the ability of a country to exercise full control over its own currency and monetary policy,” said the report, released on December 5. “Central bank money is the most basic, liquid and resilient form of money and should continue to play its role.”
Gate CBO Kevin Lee shared a more conciliatory view with CoinDesk: “While central banks rightly focus on stability, we believe the ‘substitution risk’ narrative misses the bigger picture. Private stablecoins and future CBDCs can co-exist.”
In line with recent reports from the European Central Bank (ECB) and the Bank for International Settlements (BIS), the IMF stated that “under certain circumstances, such as fire sales”, “central banks may be forced to intervene”, threatening financial stability.
In this regard, Erbil Karaman, co-founder of Human Finance, whose payment network has processed over $8 billion in stablecoin transactions, told CoinDesk: “The benefits of stablecoins far outweigh the concerns. The report fails to recognize that the majority of people live in highly unstable fiat economies.”
“Centralized policy-making and centralized financial systems have failed these people for decades, which is why they are mass-adopting stablecoins and liberating themselves,” he added.
The IMF insists that the crypto industry lacks control and compliance with the law, leaving it vulnerable to illegal transactions.
“Stablecoins can also be exploited for illicit purposes such as money laundering and terrorist financing due to their pseudonymity, low transaction costs and cross-border ease,” the IMF added.
The same case could be made for the US dollar. The Treasury Department released a report in 2024 saying, “The U.S. dollar remains a popular method of transporting and laundering illicit proceeds both within and outside the United States.”
The influential billionaire founder of Mexico’s Grupo Salinas, Ricardo Salinas Pliego, said he sees all the official anti-crypto campaigns as clear indications of the fear.
“The banks, the establishment, they’re scared because they’re going to lose the power and the money that they had for so many centuries. And that’s what this whole campaign against crypto and bitcoin is about,” he said in a recent interview with Kitco News.
The IMF’s report admitted that the challenge stablecoins represent to governmental and institutional control over money has them all on their toes. “In this sense, the presence of stablecoins can also be seen as a competitive element that encourages governments to pursue policies to avoid the loss of monetary authority.”
Kraken co-CEO Arjun Sethi stated his view in October, “This is the real story … The power to issue and control money is spreading away from institutions and into open systems that everyone can build upon.”
