‘Cryptoization’ of Emerging Markets Poses Risks to Financial Resilience: Moody’s
Cryptocurrency adoption in emerging markets poses risks to monetary sovereignty and financial resilience, credit ratings giant Moody’s Ratings said in a report on Thursday.
The risks are most acute in areas where crypto’s use extends beyond investment into savings and remittances, according to the report. Moody’s suggests that higher penetration of stablecoins pegged to the U.S. dollar weaken monetary transmission when it leads to pricing and settlement increasingly occurring outside a market’s domestic currency.
Stablecoins are crypto tokens pegged to the value of a traditional financial asset, such as a fiat currency, with the U.S. dollar comfortably the most prevalent.
“This creates ‘cryptoization’ pressures analogous to unofficial…
