The International Monetary Fund has warned that local-currency stablecoins could increase demand for dollar-linked tokens rather than reduce reliance on them.

Cointelegraph reported on Aug. 8 that IMF First Deputy Managing Director Dan Katz (댄 카츠) said that if local-currency stablecoins and dollar stablecoins operate on the same blockchain infrastructure, users could more easily move funds into digital dollars.

Katz said in a speech at the University of Cape Town that if the two stablecoins run on the same infrastructure, they can be swapped through decentralised exchanges, liquidity pools and peer-to-peer exchanges. He added that local-currency stablecoins could instead accelerate adoption of foreign-exchange stablecoins.

He said such changes could also alter the structure of foreign-exchange trading. If on-chain currency conversion increases, foreign-exchange trading may no longer go through banks and money changers, reducing frictions that authorities have used to monitor and manage capital flows.

On the demand side, he said dollar-linked tokens could have an advantage. Katz pointed to South Africa, saying that dollar-linked stablecoins have spread only in a limited way and demand for rand-linked tokens was even lower. He said it was still too early to be certain, but many users may prefer dollar tokens for liquidity, network effects, and acceptance across platforms and borders.