Could the Poor Bank on Stablecoins? Discussion Prompts for Innovators, Regulators, and Consumers

Abstract

Emerging technology is driving optimism about building a more inclusive digital economy. Will one innovation — a digital asset known as stable-coins — expand access to financial services among the poor? To encourage further study and dialogue, this note explores five open questions about whether stable-coins could promote financial inclusion in lower- and middle-income countries. The questions cover two practical issues concerning processing speed and technology available to the poor; costs to users; regulatory issues, especially compliance with existing customer funds protection rules; and implications for financial systems with limited foreign exchange reserves.

The note identifies relevant considerations regarding the gender gap, "global stable-coins," and central bank digital currency. Dialogue between innovators, regulators, and consumer advocates will be crucial in determining whether stable-coins or other "crypto-assets" could help to build a more inclusive digital financial system and an economy that serves the needs of all, including the poor.

Keywords: digital currency, crypto-assets, stable-coin, financial inclusion, innovation, regulation, women, central bank digital currency

JEL Classification: G23, G28, O16, O30