Payment stablecoins do not affect only bank lending. They also pose new challenges for monetary policy, especially in emerging countries with weak currencies and high inflation.
📌 What is at stake ● When households and businesses move funds from the local currency into dollar-backed stablecoins, a form of "digital dollarization" occurs. ● This shrinks the domestic monetary base, weakens the effectiveness of interest-rate policy and limits central banks' ability to control liquidity and credit. 𝐀𝐬 𝐑𝐨𝐛𝐞𝐫𝐭𝐨 𝐂𝐚𝐦𝐩𝐨𝐬 𝐍𝐞𝐭𝐨 𝐰𝐚𝐫𝐧𝐞𝐝: "Quando o investidor tira recursos dos depósitos bancários para colocá-los em ativos digitais, os bancos perdem capacidade de conceder crédito. Isso já está acontecendo em alguns países e deve ser um dos principais temas de debate entre autoridades monetárias nos próximos seis meses." [When investors take money out of bank deposits and put it into digital assets, banks lose lending capacity. This is already happening in some countries and should be one of the main topics of debate among monetary authorities over the next six months.]
📌 Main risks ● Loss of monetary autonomy: the larger the stock of dollar stablecoins, the less effective classic tools become (e.g., the Selic rate, reserve requirements). ● International transmission of shocks: changes in U.S. interest rates or liquidity affect economies that use stablecoins as a store of value almost immediately. ● Volatility in crises: in times of stress, a rush into stablecoins can intensify outflows from the local financial system.
📌 Possible responses ● Tokenized public infrastructure (e.g., tokenized deposits in local currency), which competes in efficiency with private stablecoins while keeping the credit function within the regulated perimeter. ● International coordination to set supervision and interoperability standards. ● Clear transparency rules for stablecoin issuers, strengthening confidence in reserves and governance.
𝐈𝐧 𝐬𝐡𝐨𝐫𝐭: stablecoins increase the efficiency of global payments but also reduce the effectiveness of monetary policy, especially in vulnerable economies. "Digital dollarization" raises a central question: how to preserve monetary autonomy in a world where money increasingly circulates outside central bank balance sheets.
➡️ In the next post, we will close the series by discussing prudential standards and systemic risks, including the debate on stablecoins as part of "shadow banking".
Authors: Roberto Panucci, Tiago Severo Gomes and Marcelo De Callis
