IMF: Stablecoins Could Boost Demand for Dollar-backed Tokens

Stablecoins linked to domestic currencies may not reduce reliance on dollar-backed tokens as intended and could instead make it easier for users to move into digital dollars, according to a senior International Monetary Fund (IMF) official.

Speaking at the University of Cape Town on Friday, IMF First Deputy Managing Director Dan Katz said that once local-currency and dollar stablecoins operate on the same blockchain infrastructure, users can exchange between them through decentralized exchanges, liquidity pools or peer-to-peer transactions.

He said this could shift more foreign exchange activity away from banks and traditional currency dealers, reducing the friction that currently gives authorities greater visibility and control over capital flows. “In this way, local-currency stablecoins might even accelerate the adoption of FX stablecoins,” he said.

Dollar stablecoins may retain stronger appeal

Katz pointed to South Africa as an example, noting that dollar-backed stablecoins have so far gained limited adoption, while rand-denominated alternatives have attracted even less demand. Although he said it is still too early to draw firm conclusions, users may continue to favor dollar-backed stablecoins because of their deeper liquidity, stronger network effects and broader acceptance across platforms and borders.

The impact could vary significantly by country. In economies that are already heavily dollarized, stablecoins may simply replace existing forms of dollar holdings. However, in countries where access to foreign currency is more restricted and economic frameworks are weaker, stablecoins could increase demand for dollars by making them easier to access digitally.

IMF calls for regulation of stablecoin access points

Katz urged policymakers to bring stablecoin onramps, offramps and onchain exchange points within existing regulatory frameworks. These access points are likely to become increasingly important as stablecoin markets grow, particularly if users can move seamlessly between domestic-currency tokens and dollar-backed alternatives.

For regulators, the challenge will be balancing stablecoin innovation with the need to maintain oversight of foreign exchange activity and capital flows.

Sources:

https://www.imf.org/en/news/articles/2026/08/07/sp080726-stablecoins-emerging-markets-dan-katz

https://cointelegraph.com/news/imf-domestic-stablecoins-dollar-token-demand