Stablecoins and the Monetary and Financial System

Key Points

• To explore the role of stablecoins within the monetary and financial systems.
• Literature review on stablecoins and their functionalities
• Analysis of stablecoins' impact on financial stability
• Comparison with traditional monetary systems
• Stablecoins offer new mechanisms for digital transactions.
• They may enhance financial inclusivity but pose regulatory challenges.
• Potential risks to monetary policy effectiveness were identified.