Amid an intensifying international focus on stablecoins, the International Monetary Fund (IMF) has released a 56-page report detailing what it sees as the key risks surrounding their adoption.
The report draws parallels from the claims many other central banks and international financial organizations make regarding the threat stablecoins represent to governmental monetary control, to ultimately argue in favor of Central Bank Digital Currencies (CBDC).
“Currency substitution facilitated by stablecoin adoption would impinge on monetary sovereignty, a country’s ability to exercise full control over its own currency and monetary policy,” the report released Dec. 5 stated. “Central bank money is the most basic, liquid and resilient form of money, and should continue to play its role.”
Gate CBO Kevin Lee’s view shared a more conciliatory view with CoinDesk: “While central banks rightly focus on stability, we believe the narrative of ‘substitution risk’ misses the bigger picture. Private stablecoins and future CBDCs can co-exist.”
In line with recent European Central Bank (ECB) and the Bank for International Settlements (BIS) reports, the IMF stated that “under certain circumstances, such as fire sales”, “central banks could 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 acknowledge 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 the crypto industry lacks controls and regulatory compliance, making it vulnerable to illegal transactions.
“Stablecoins could also be exploited for illicit purposes like 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 U.S. dollar. The Treasury released a report in 2024 saying, “the U.S. dollar remains a popular method to transport and launder illicit proceeds both within and outside of the United States.”
Influential billionaire founder of Mexican Grupo Salinas, Ricardo Salinas Pliego, said he views all the official anti-crypto campaigns as clear indications of the fear.
“The banks, the establishment, they are scared, because they are 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 all 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 could also be seen as a competitive element incentivizing governments in pursuing policies, in order to avoid the loss of monetary authority.”
Kraken co-CEO Arjun Sethi declared his view in October, “This is the real story … The power to issue and control money is diffusing away from institutions and into open systems that anyone can build on.”