Stablecoin Growth Raises New Questions for Policymakers

Stablecoins have nearly tripled in market capitalization between 2021 and 2025, reaching around $300 billion, but their activity remains largely within the crypto ecosystem.

The International Monetary Fund's first deputy managing director, Dan Katz, discussed the potential benefits and risks of stablecoins during a public lecture at the University of Cape Town. He noted that tokenisation could help emerging markets leapfrog market development by reducing reliance on legacy systems and expanding access.

Katz highlighted that advances in artificial intelligence may accelerate the adoption of stablecoins due to their programmability and settlement capabilities. Stablecoins' end-user cost can be significantly cheaper than the current average global remittance cost, which is 6.5%.