Former IMF official: Stablecoins may reinforce financial power concentration, exacerbating US dollar dominance and small country currency risks
Wu stated that Eswar S. Prasad, a former official of the International Monetary Fund and a professor at Cornell University, pointed out in a recent article titled "The Stablecoin Paradox" that while stablecoins reduce payment costs, improve cross-border transfer efficiency, and to some extent promote financial inclusion, their essence may reinforce the concentration of financial power, exacerbate the dominance of the US dollar, and reshape the international monetary system. He believes that stablecoins are not truly decentralized; users rely on the issuing institutions rather than code trust. With the loosening of US legislation, the potential entry of giants like Amazon and Meta, and major banks exploring the issuance of stablecoins, a pattern of "leading institutions monopolizing stablecoins" may emerge in the future. Meanwhile, the global expansion of US dollar stablecoins may further erode the monetary sovereignty of small countries.