Mass adoption of Stablecoin could lead to currency substitution

The rapid growth of digital currencies has brought both opportunities and challenges to the countries of Latin America and the Caribbean (LAC). While crypto-assets promise benefits such as financial inclusion and faster payments, they also carry risks, especially with regard to domestic currency substitution. In this article, we will discuss the risks associated with stablecoins, especially the threat they pose to domestic currencies, and discuss how Central Bank Digital Currencies (CBDCs) can mitigate them.