European Central Bank board member Isabel Schnabel said on Monday that increased use of stablecoins could reinforce the dollar's global dominance, undermine some nations' ability to set monetary policy, and even diminish the euro's role.
Stablecoins, a type of cryptocurrency pegged to assets for stable value, are still relatively low in use but growing rapidly.
Most stablecoins are pegged to the U.S. dollar. Rapid issuance growth could slow or reverse a two-decade decline in the dollar's global role, some economists argue.
"The dollar's dominance would be reinforced, not necessarily due to stronger economic fundamentals but due to network effects, scale, and first-mover advantages," Schnabel said at a Bank of Korea conference in Seoul.
