Haciyev Reşit 
The global financial world remains deeply divided on the issue of stablecoins. On one side, central banks and regulators warn that these digital assets could undermine monetary stability, while on the other, crypto industry leaders and analysts view stablecoins as a revolutionary innovation that could enhance the efficiency of the financial system. So, which side is right?
Central Banks Raise the Red Flag
Pan Gongsheng, Governor of the People’s Bank of China (PBOC), recently warned that stablecoins could pose risks to the global financial system, citing weaknesses in KYC (Know Your Customer) and AML (Anti-Money Laundering) compliance.
“Stablecoins can increase the fragility of the global financial system and weaken monetary control.”
— Pan Gongsheng, Governor of the PBOC
His comments followed IMF and World Bank discussions on the risks posed by private digital currencies. China, which is accelerating its digital yuan (e-CNY) initiative, argues that private stablecoins may conflict with state-controlled monetary policy. Similarly, Pierre Gramegna, head of the European Stability Mechanism (ESM), stated that “rapid stablecoin growth without proper safeguards could threaten the entire financial system.”
Global organizations share this concern. The IMF and the Financial Stability Board (FSB) warn that the $300 billion stablecoin market could distort credit flows and trigger financial stress. In short, central banks fear that private digital currencies could erode the framework of monetary regulation.
Coinbase and Analysts: “The Fears Are Overblown”
The Coinbase Institute dismissed such warnings as exaggerated, arguing in a recent report that stablecoins do not drain bank deposits nor pose a threat to the credit system.
According to Coinbase:
- S. banks currently hold trillions of dollars in liquidity.
- Stablecoin volumes remain tiny in comparison.
- Therefore, traditional lending and digital payments can coexist.
Moreover, most stablecoin demand comes from outside the U.S., which expands the global reach of the U.S. dollar and reinforces its dominance. Coinbase also highlighted that stablecoins enable faster, cheaper, and programmable transactions — similar to how money market funds reshaped finance in the 1980s.
What Does the Data Say?
According to McKinsey & Company, stablecoin transactions account for less than 1% of global daily money transfers too small to pose systemic risks at present. The European Central Bank (ECB) echoes this view, noting that stablecoins’ current influence in the Eurozone remains limited, though a lack of regulation could present long-term risks.
Academic studies support this perspective. Hongzhe Wen and Songbai Li from Harvard and Tsinghua University argue that fully reserve-backed and transparently audited stablecoins could actually reduce financial risk and enhance liquidity efficiency. Meanwhile, the Brookings Institution stresses that regulation should not only mitigate risks but also modernize payment systems and strengthen financial infrastructure.
Threat or Transformation?
The truth lies somewhere in between. Stablecoins represent both a challenge and an opportunity. If poorly designed or mismanaged, they could weaken monetary control and undermine financial stability. However, if well-regulated and fully backed by reserves, they could make money faster, safer, and more globally accessible than ever before.
Experts agree that the key is not to ban stablecoins, but to regulate them properly. Because in the end, stablecoins have the potential not just to reshape finance, but to fundamentally redefine the nature of global payments in the digital age..
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