The International Monetary Fund (IMF) has warned that the growing use of dollar-backed stablecoins must not weaken fiscal and monetary discipline as governments face rising debt and borrowing costs.
IMF Managing Director Kristalina Georgieva gave the warning at the Jackson Hole Economic Policy Symposium in Wyoming, where she discussed the impact of financial innovation on the global monetary system.
Georgieva said dollar-backed stablecoins could benefit issuer countries, particularly the United States, by expanding access to global investors and potentially lowering government borrowing costs.
The IMF estimates that about $15 trillion in dollars is held outside the United States, providing a large pool of funds that stablecoins could potentially tap. However, Georgieva stressed that any reduction in borrowing costs would be marginal and could come at the expense of other countries if investors shift from domestic bonds to dollar-backed stablecoin assets.
“Stablecoins could reduce the cost of financing for a handful of countries, but they will not eliminate the need for the heavy fiscal lifting,” Georgieva said.
Her warning comes as major economies face increasing debt pressures. The IMF said 10-year government bond yields in the United States, France, and Japan were at their highest levels since 2007, 2008, and 1996, respectively, pushing borrowing costs higher across global markets.
The Fund also warned that stablecoins could pose challenges for emerging and developing economies by encouraging currency substitution, weakening monetary policy transmission, and reducing the effectiveness of capital controls.
Georgieva urged governments to address their fiscal problems through credible medium-term consolidation, including controlling primary spending and increasing revenues.
She also cautioned central banks against cutting interest rates or restarting large-scale asset purchases simply to ease government debt pressures, saying their priority must remain keeping inflation low and stable.
Despite the risks, the IMF acknowledged that stablecoins and other financial technologies could make cross-border payments faster and cheaper. It called for coordinated international regulation to ensure the benefits of financial innovation do not come at the expense of financial stability.
The 2026 Jackson Hole symposium focused on financial innovation, including stablecoins, tokenization, and the implications of new payment technologies for monetary policy and global financial integration.
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