IMF deputy says local-currency stablecoins may accelerate dollar stablecoin adoption

IMF First Deputy Managing Director Dan Katz said local-currency stablecoins issued to reduce reliance on dollar stablecoins could instead broaden their use, Cointelegraph reported. In a speech at the University of Cape Town, Katz explained that if local-currency and dollar-based stablecoins circulate on the same blockchain infrastructure, they can be easily exchanged through DEXs, liquidity pools, and P2P transactions. In that case, foreign-exchange activity could shift on-chain without going through banks or money changers, increasing access to dollar stablecoins. Katz added that in countries where access to dollars is limited, such changes could boost demand for foreign currency, and stressed that regulators should bring stablecoin deposits, withdrawals, and on-chain foreign-exchange routes into the regulatory fold.