Research note · Draft in progress
Stablecoins in Developing Economies
An ongoing policy-focused study of why households turn to dollar-pegged stablecoins and how wider adoption could affect domestic monetary systems.
Research question
Why do households adopt private digital dollars?
The paper asks why residents of developing economies use dollar-pegged stablecoins for saving and payments, with a focus on inflation, currency depreciation and access to conventional dollar accounts.
It also asks how adoption affects institutions outside the transaction. The research considers currency substitution, monetary policy transmission, cross-border capital flows and the AML/KYC obligations attached to stablecoin services.
Current argument
Individual utility may create policy costs
My working argument starts with a tension. A dollar-pegged token may give a household another way to preserve purchasing power, receive remittances or make cross-border payments. Adoption at scale may also reduce demand for local currency and make domestic financial activity harder for authorities to observe.
The research has not established the size or direction of those effects. I am testing the argument against adoption evidence and policy literature. The analysis treats stablecoin use as one possible response among several.
Draft position: These are research propositions under review, not final findings or financial advice.
Scope and status
The evidence review is ongoing
I am reviewing research on adoption in emerging markets, inflation hedging, currency substitution and illicit-finance controls. The planned policy comparison includes the UK regulatory framework as a reference point for how another jurisdiction defines issuer and service-provider obligations.
The paper remains a draft. The next pass will tighten the country selection, verify claims against primary sources and separate evidence about individual use from claims about economy-wide effects. I will add conclusions after that source review.