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Stablecoins: Impact and Opportunities for the ASEAN+3 Region
The US GENIUS Act clarifies dollar stablecoins’ legal status, enhancing regulated financial integration. ASEAN+3 sees benefits in cross-border payments but faces risks, necessitating careful policy management for a resilient monetary system.
Integration of Stablecoins in the Financial System
The US GENIUS Act establishes legal guidelines for dollar stablecoins, promoting their integration into the regulated financial sector. Rather than replacing traditional money, stablecoins function as tokenized non-bank money, backed by secure assets. This tokenization process allows for more versatile money movements across platforms and international borders, enhancing financial connectivity and innovation.
Implications for ASEAN+3
For countries in the ASEAN+3 region, dollar stablecoins present potential benefits for cross-border payment efficiency. However, they also introduce risks such as increased currency substitution and challenges in managing capital flows, which could complicate monetary policy implementation. Despite these concerns, well-regulated local-currency stablecoins can act as a valuable complement to existing payment systems, aiding the transition to a more layered monetary environment.
Policy Strategies for Stablecoin Integration
To maximize the opportunities and mitigate risks, policymakers should define clear regulations for foreign-currency stablecoins, bolster monetary policy credibility, and consider local-currency token issuance. Promoting the uniformity of money and interoperability between traditional and tokenized forms is crucial. These strategies aim to establish a robust, interconnected monetary system, firmly anchored in central bank money, fostering resilience and innovation over time.
