U.S. Dollar-Pegged Stablecoins Could Create Major Headaches for Global Monetary Policymakers

U.S. Dollar-Pegged Stablecoins Could Create Major Headaches for Global Monetary Policymakers

V. Anantha Nageswaran, India’s Chief Economic Adviser, warned that the growing use of U.S.-dollar-backed stablecoins may pose significant challenges to global monetary policy, monetary transmission and seigniorage for sovereign nations.
He noted that as stablecoins reach a market size of over $300 billion, their influence on traditional banking and deposit flows grows — potentially undermining local currencies and regulatory frameworks. While countries like India maintain strong domestic payment systems (e.g., UPI), Nageswaran warned that a widespread “dollar-stablecoin economy” could weaken national control over monetary levers.