Global | Stablecoins: key insights to understand their rise and impact

Summary

If someone had said just a few years ago that “private tokens” could influence debates on global payments, financial regulation, or monetary sovereignty, it would have sounded like science fiction. In recent months, that conversation has become routine.

Key points

• Key points:
• A stablecoin is a “digital voucher” whose value is pegged to a reference asset, typically a currency. The most common are collateralized stablecoins (backed by a reserve of liquid assets), while others rely on algorithmic mechanisms.
• As of today, the primary use case remains closely tied to the crypto ecosystem: stablecoins act as a liquidity bridge for entering and exiting other cryptoassets
• The issuers’ business model is relatively straightforward: when a user provides dollars, euros, or another fiat currency, the issuer mints stablecoins and invests that reserve in liquid assets that are, in principle, high quality (for example, short-term government debt, repos, or deposits).
• For banks, stablecoins represent both a challenge and an opportunity. They can erode revenues from cross-border payments and remittances, and if they compete for deposits, they may increase funding costs and constrain lending, especially in emerging markets.
• In monetary policy, the greatest risk arises when a foreign-currency stablecoin is widely adopted: this can lead to de facto currency substitution—a form of “digital dollarization” that weakens the transmission of local monetary policy and may increase capital flow volatility, particularly in economies with fragile institutions and currencies.

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