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01 April 2024
The IMF has expressed interest in the use of stablecoins and central bank digital currencies (CBDCs) in remote regions

The IMF report notes that the use of digital currencies and stablecoins can help Pacific island countries improve access to and the quality of financial services. The problems faced by these countries include limited access to financial services, leading to persistent poverty and inequality, as well as reliance on remittances, which are subject to risks from the reduction of interbank connections.

The IMF urges Pacific island states to consider the use of digital currencies to develop payment systems and blockchain technologies to stimulate economic growth. The report primarily focuses on CBDCs, although it also mentions the possibility of using some stablecoins.

The IMF does not recommend that small island states issue their own sovereign stablecoins due to the lack of regulatory mechanisms but suggests considering the use of private stablecoins, such as USDT from Tether, under strict regulation.

According to the report, currently, no Pacific island country is using private cryptocurrencies or stablecoins, but some are exploring the possibility of implementing CBDCs. The IMF had previously cautioned countries in the region against adopting digital assets; however, it acknowledged that there are characteristics in the region that make crypto payments potentially effective.

In January, IMF Managing Director Kristalina Georgieva stated that cryptocurrencies are primarily an investment tool.