Research paper · Submitted August 2026
Stablecoins in Developing Economies
A completed policy paper examining 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.
Core argument
Individual utility may create policy costs
The paper’s central 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 paper does not claim to establish the size or direction of those effects. It tests the argument against adoption evidence and policy literature, treating stablecoin use as one possible response among several.
Scope: These are research propositions, not financial advice.
Scope and status
The paper is complete
The evidence review covers research on adoption in emerging markets, inflation hedging, currency substitution and illicit-finance controls. The policy comparison uses the UK regulatory framework as a reference point for how another jurisdiction defines issuer and service-provider obligations.
The paper was completed in August 2026 and submitted to FinTech West for publication.