Stablecoin boom risks ‘cryptoization’ as fragmented rules leave economies exposed — Moody’s

Moody’s warns “cryptoization” is undermining monetary policy and bank deposits in emerging markets amid uneven regulatory oversight.

As stablecoin and cryptocurrency adoption accelerate worldwide, emerging markets face mounting risks to monetary sovereignty and financial stability, according to a new report from Moody’s Ratings. 

The credit rating service warned that widespread use of stablecoins — tokens pegged 1:1 with another asset, usually a fiat currency like the US dollar — could weaken central banks’ control over interest rates and exchange rate stability, a trend called “cryptoization.” 

Banks could also “face deposit erosion if individuals shift savings from domestic bank deposits into stablecoins or crypto wallets,” the report said. 

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