INSUBCONTINENT EXCLUSIVE:
Cryptocurrencies offer, in theory, a cheaper and quicker way of sending money across bordersThe advent of digital currencies in emerging
markets could spark "cryptoization" of local economies, potentially undermining exchange and capital controls and upsetting financial
emerging and developing market economies such as Vietnam, India and Pakistan seeing rapid growth in some measures of adoption, according to
United States blockchain researcher Chainalysis.Cryptocurrencies offer, in theory, a cheaper and quicker way of sending money across
Backers say digital tokens such as stablecoins could also help protect savings from high inflation or fluctuations in local currencies.In
September, El Salvador became the first country in the world to adopt bitcoin as legal tender, with backers tipping the experiment to lower
inefficient payment systems are among the drivers of cryptocurrency adoption in emerging economies, along with the lure of quick gains that
accurately.Factors such as low credibility of central banks and weak domestic banking systems that can fuel "dollarization" can also
contribute to growing crypto use, the Fund added.Dollarization is where a foreign currency - typically the United States currency - is used
in addition to, or instead of, a domestic currency
High inflation or the instability of a domestic currency are among the drivers of the process.Wide adoption of stablecoins - digital tokens
designed to hold a steady value and seen as useful for savings and commerce - could also pose significant challenges by reinforcing existing
financial stability risks through currency mismatches on the balance sheets of banks, firms, and households," it said."Cryptoization" could
nations to strengthen macroeconomic policies and consider the possible benefits from issuing central bank digital currencies as a response
