IMF Warns Local Stablecoins Risk Accelerating Dollarisation Across Africa
The IMF has warned at a Cape Town event that locally issued stablecoins could deepen dollarisation risk across African economies, reframing the pan-continental stablecoin policy conversation. The caution arrives as multiple African markets are simultaneously advancing stablecoin infrastructure and regulatory frameworks.
Local Stablecoins: the cure that could worsen the disease
The intuition behind a rand-denominated or naira-denominated stablecoin is sound: give people a digital currency that doesn't bleed value into dollars.
But the IMF's Dan Katz identified the problem at Cape Town last week. Once local-currency and dollar stablecoins run on the same blockchain, anyone can swap directly between them through decentralised exchanges, bypassing the banks and licensed dealers that governments rely on to enforce currency controls. The local token doesn't shield the currency — it builds a faster road to the dollar one.
South Africa's own data makes this concrete: dollar stablecoin trading on domestic platforms went from under R4 billion in 2022 to nearly R80 billion in the first ten months of 2025. Rand stablecoins attracted a fraction of that interest.
For African markets where currency confidence is already fragile, the risk isn't theoretical. A well-intentioned stablecoin programme could hand ordinary savers a quieter, frictionless exit from the local currency the moment inflation ticks up.
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