Moody's: Stablecoins take the lead in "cryptoization", and the currency circle wants to seize "monetary sovereignty" in emerging markets

# Moody’s Warns: Stablecoin-Driven "Cryptification" Wave Poses Growing Risks to Emerging Markets’ Monetary Sovereignty and Financial Stability  

By Li Xiaoyin  

Source: Wall Street CN  

Rating agency Moody’s has issued a warning that the "cryptification" wave driven by stablecoins is posing increasingly severe challenges to the monetary sovereignty and financial stability of emerging markets.  

In its latest report released recently, Moody’s pointed out that as the adoption rate of cryptocurrencies such as stablecoins accelerates globally, emerging markets face the risk of weakened monetary sovereignty. Under this "cryptification" trend, stablecoins pegged to fiat currencies like the U.S. dollar are widely used, thereby undermining central banks’ ability to control interest rates and exchange rates.  

The report clearly states that if individuals shift their savings from domestic bank deposits to stablecoins or crypto wallets, the banking system may face the risk of "deposit outflows." Moody’s notes that such capital outflows not only affect banks’ liquidity but also pose a potential threat to overall financial stability.  

Data shows that the number of global digital asset holders reached approximately 562 million in 2024, an increase of 33% from the previous year. Moody’s emphasizes that while the popularity of crypto assets in developed economies is mostly driven by clear regulations and well-established investment channels, their growth is fastest in emerging markets such as Latin America, Southeast Asia, and Africa—mainly motivated by demands for remittances, mobile payments, and inflation hedging.  

## Escalating "Cryptification" Risks  

Moody’s argues that the core risk of "cryptification" lies in its erosion of a country’s monetary policy independence and the stability of its financial system.  

The report states that when a large amount of economic activity is conducted through stablecoins, central banks’ ability to manage the economy by adjusting interest rates will be weakened. At the same time, if U.S. dollar-pegged stablecoins become the mainstream medium of exchange, they will also directly impact the exchange rate stability of the local currency.  

Furthermore, Moody’s warns that stablecoins themselves also pose systemic risks.  

The report points out that although stablecoins are considered relatively safe, their rapid growth has introduced systemic vulnerabilities: inadequate regulation may trigger runs on reserves, and if a depegging event occurs, it could force governments to take costly bailout measures.  

## Unbalanced Growth and Regulatory Gaps  

The global adoption of crypto assets shows significant regional imbalance, and lagging regulation has exacerbated the risks faced by emerging markets.  

Moody’s emphasizes in the report that the current regulatory landscape is extremely fragmented. Data shows that less than one-third of countries worldwide have implemented comprehensive digital asset rules, leaving many economies directly exposed to market volatility and systemic shocks.  

This regulatory gap stands in stark contrast to the differences in growth models. The adoption of crypto in developed markets focuses more on investment, while people in emerging markets primarily use it out of practical needs—such as cross-border remittances and hedging against inflation risks of their local currencies.  

Moody’s believes that this divergence not only demonstrates the potential of digital assets in advancing financial inclusion but also highlights that in the absence of adequate regulatory oversight, the risks of financial instability are continuing to accumulate.  

## Disclaimer  

The market is risky, and investment requires caution. This article does not constitute investment advice. Users should consider whether any opinions, views, or conclusions in this article are consistent with their specific circumstances. Any investment made based on this article shall be at the user’s own risk.