A number of emerging markets and developing countries (EMDE) are looking for stablecoin and central bank digital currencies (CBDC) to address weaknesses in their financial systems.
But from the report thatpublishThe Bank for International Settlements (BIS) on Friday said these cryptocurrencies could create daunting problems in these markets. And it doesn’t address the problems that other fintech innovations are facing.
“The creation of stablecoins aims to improve access to financial services and cross-border remittances – but it is not necessary and insufficient to achieve these policy goals,” the report authors, “What does Digital Money Mean for Emerging.” Market and Developing Countries writes.”
EMDEs in Latin America and other regions have increasingly switched to stablecoin as a store of value, with stablecoins more attractive in countries where local currencies tend to be less stable. and may be subject to inflation
BIS in Basel, Switzerland It is a 91-year-old organization that supports central bank efforts to secure banking and finance through research. and by promoting cooperation between central banks on issues
The report’s authors question whether stablecoins will be able to “offer sustainable competitive advantages over the rapidly evolving digital payment services including digital ID, e-money, and mobile banking,” and they It added that stablecoins may create new risks related to issues such as governance, efficiency in payment processes, consumer protection. , and data privacy
And the author expressed concern about CBDC, writing, “It’s a systemic risk. Households and other agents may switch from bank deposits or other instruments to CBDCs and trigger a ‘digital run’ at unprecedented speed.
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