# IMF: Domestic Stablecoins Could Boost Demand for Dollar-Backed Tokens IMF official suggests local stablecoins might facilitate the transition to dollar tokens. - **Source:** [Cointelegraph.com News](https://brifing.si/source/2e81e982-0137-4db0-8ac2-351f37085775) - **Published:** 2026-08-08 - **Topic:** [Finance](https://brifing.si/c/finance) - **Original article:** - **On Brifing:** https://brifing.si/s/b92dac03-7796-4354-82ae-86d560c92539 ## IMF Evaluates the Impact of Domestic Stablecoins IMF First Deputy Managing Director Dan Katz stated that domestic stablecoins, intended to reduce reliance on dollar-backed tokens, might instead make it easier for users to transition to digital dollars. Katz explained that this would occur on blockchain infrastructure, allowing users to convert between local and dollar stablecoins seamlessly. ## Blockchain Infrastructure and Ease of Conversion Katz noted that if local and dollar stablecoins operate on the same blockchain infrastructure, users could easily convert between them through decentralized exchanges, liquidity pools, or peer-to-peer swaps. This shift could move foreign exchange activity away from banks and currency dealers, complicating capital flow monitoring. ## The South Africa Example Katz highlighted that dollar-backed stablecoins have gained limited traction in South Africa, while rand-linked tokens have attracted even less demand. This suggests that local stablecoins might increase demand for dollar tokens. Katz added that it is too early to draw firm conclusions on this matter. ## Advantages of Dollar Tokens Katz explained that many users might prefer dollar tokens due to their liquidity, network effects, and cross-platform acceptance. These factors could lead to broader global adoption of dollar tokens. Katz also noted that the risks vary by country. ## Country-Specific Risks Katz stated that stablecoins could largely replace existing dollar holdings in highly dollarized economies but might increase foreign currency demand in countries with restricted dollar access and weak economic frameworks. This could impact national currency policies and challenge economic stability. ## Call for Regulation Katz urged authorities to bring stablecoin onramps, offramps, and onchain exchange points within regulatory frameworks. This step could ensure the safe and orderly use of stablecoins and reduce risks in the financial system. ## Potential Effects of Dollar Stablecoins Katz pointed out that dollar stablecoins could improve foreign exchange access but might amplify currency runs. This could have serious consequences, especially in economically unstable countries. Katz emphasized the need for careful management of these risks. ## Conclusion and Recommendations IMF official Dan Katz concluded that domestic stablecoins could boost demand for dollar tokens, potentially leading to significant changes in the global financial system. Katz stressed the need for authorities to take proactive steps and strengthen regulatory frameworks to address these challenges. ## Sources covering this story - https://cointelegraph.com/news/imf-domestic-stablecoins-dollar-token-demand?utm_source=rss_feed&utm_medium=rss&utm_campaign=rss_partner_inbound — --- _Summary written by Brifing from the original reporting. Copyright in the original article belongs to its publisher; read the full piece at the link above._