Latest news with #dollarization
Reuters
3 days ago
- Business
- Reuters
Amundi warns US stablecoin policy could destabilise global payments system
LONDON, July 3 (Reuters) - Europe's largest asset manager has raised concerns that a boom in dollar-backed stablecoins in the wake of the United States' GENIUS Act could cause a major shift in money flows that destabilises the global payment system. The U.S. Senate passed the GENIUS Act a bill last month to create a regulatory framework for the U.S.-dollar-pegged cryptotokens. It is expected to be passed by the House of Representatives and approved by President Donald Trump, leaving other countries worried about a wave of so-called 'dollarization' of economies if their own populations buy them. "It could be genius, or it could be evil," Amundi Asset Management's chief investment officer Vincent Mortier told Reuters, voicing his concerns about the U.S. act. JPMorgan expects the amount of stablecoins in circulation to roughly double to $500 billion in the next few years, although some estimates have put it as high as $2 trillion. As stablecoins need be pegged to the dollar under the U.S. act, it will trigger buying of U.S. Treasury bonds. That has its benefits for the U.S. as it grapples with a gaping budget deficit, but could also pose problems for the U.S. and other countries. "In doing so you create an alternative to the U.S. dollar and that could lead to more weakening of the dollar," Mortier said. "Because if a country is pushing a stablecoin, it could be perceived as pushing the message that the dollar is not that strong." Currently, 98% of all stablecoins are pegged to the dollar, but more than 80% of stablecoin transactions happen outside the United States. Italy's finance minister, Giancarlo Giorgetti, warned in April that the U.S. stablecoin policies presented an "even more dangerous" threat to European financial stability than Trump's trade war. His argument was that access to dollars without needing a U.S. bank account would be attractive to millions of people and could undermine countries' monetary sovereignty. The Bank for International Settlements issued a similar warning on the risks posed by stablecoins, noting their potential to undermine monetary sovereignty, transparency issues and the risk of capital flight from emerging economies. Mortier, who oversees the 2 trillion euros ($2.36 trillion) of assets Amundi manages - none of which are in crypto - said he still had not fully made up his mind about stablecoins, but the worry was that a mass uptake could impact financial stability. As well as the dollarization issue, they would become "quasi-banks" he said, as people will deposit money in a coin assuming they can take it out again whenever they want. They will also be used as a direct means of payment. "It could potentially destabilise the global payment system," he said. "I'm not so sure it's a good idea". ($1 = 0.8483 euros)
CNA
3 days ago
- Business
- CNA
Amundi warns US stablecoin policy could destabilise global payments system
LONDON :Europe's largest asset manager has raised concerns that a boom in dollar-backed stablecoins in the wake of the United States' GENIUS Act could cause a major shift in money flows that destabilises the global payment system. The U.S. Senate passed the GENIUS Act a bill last month to create a regulatory framework for the U.S.-dollar-pegged cryptotokens. It is expected to be passed by the House of Representatives and approved by President Donald Trump, leaving other countries worried about a wave of so-called 'dollarization' of economies if their own populations buy them. "It could be genius, or it could be evil," Amundi Asset Management's chief investment officer Vincent Mortier told Reuters, voicing his concerns about the U.S. act. JPMorgan expects the amount of stablecoins in circulation to roughly double to $500 billion in the next few years, although some estimates have put it as high as $2 trillion. As stablecoins need be pegged to the dollar under the U.S. act, it will trigger buying of U.S. Treasury bonds. That has its benefits for the U.S. as it grapples with a gaping budget deficit, but could also pose problems for the U.S. and other countries. "In doing so you create an alternative to the U.S. dollar and that could lead to more weakening of the dollar," Mortier said. "Because if a country is pushing a stablecoin, it could be perceived as pushing the message that the dollar is not that strong." Currently, 98 per cent of all stablecoins are pegged to the dollar, but more than 80 per cent of stablecoin transactions happen outside the United States. Italy's finance minister, Giancarlo Giorgetti, warned in April that the U.S. stablecoin policies presented an "even more dangerous" threat to European financial stability than Trump's trade war. His argument was that access to dollars without needing a U.S. bank account would be attractive to millions of people and could undermine countries' monetary sovereignty. The Bank for International Settlements issued a similar warning on the risks posed by stablecoins, noting their potential to undermine monetary sovereignty, transparency issues and the risk of capital flight from emerging economies. Mortier, who oversees the 2 trillion euros ($2.36 trillion) of assets Amundi manages - none of which are in crypto - said he still had not fully made up his mind about stablecoins, but the worry was that a mass uptake could impact financial stability. As well as the dollarization issue, they would become "quasi-banks" he said, as people will deposit money in a coin assuming they can take it out again whenever they want. They will also be used as a direct means of payment. "It could potentially destabilise the global payment system," he said. "I'm not so sure it's a good idea".
Yahoo
3 days ago
- Business
- Yahoo
Amundi warns US stablecoin policy could destabilise global payments system
By Marc Jones LONDON (Reuters) -Europe's largest asset manager has raised concerns that a boom in dollar-backed stablecoins in the wake of the United States' GENIUS Act could cause a major shift in money flows that destabilises the global payment system. The U.S. Senate passed the GENIUS Act a bill last month to create a regulatory framework for the U.S.-dollar-pegged cryptotokens. It is expected to be passed by the House of Representatives and approved by President Donald Trump, leaving other countries worried about a wave of so-called 'dollarization' of economies if their own populations buy them. "It could be genius, or it could be evil," Amundi Asset Management's chief investment officer Vincent Mortier told Reuters, voicing his concerns about the U.S. act. JPMorgan expects the amount of stablecoins in circulation to roughly double to $500 billion in the next few years, although some estimates have put it as high as $2 trillion. As stablecoins need be pegged to the dollar under the U.S. act, it will trigger buying of U.S. Treasury bonds. That has its benefits for the U.S. as it grapples with a gaping budget deficit, but could also pose problems for the U.S. and other countries. "In doing so you create an alternative to the U.S. dollar and that could lead to more weakening of the dollar," Mortier said. "Because if a country is pushing a stablecoin, it could be perceived as pushing the message that the dollar is not that strong." Currently, 98% of all stablecoins are pegged to the dollar, but more than 80% of stablecoin transactions happen outside the United States. Italy's finance minister, Giancarlo Giorgetti, warned in April that the U.S. stablecoin policies presented an "even more dangerous" threat to European financial stability than Trump's trade war. His argument was that access to dollars without needing a U.S. bank account would be attractive to millions of people and could undermine countries' monetary sovereignty. The Bank for International Settlements issued a similar warning on the risks posed by stablecoins, noting their potential to undermine monetary sovereignty, transparency issues and the risk of capital flight from emerging economies. Mortier, who oversees the 2 trillion euros ($2.36 trillion) of assets Amundi manages - none of which are in crypto - said he still had not fully made up his mind about stablecoins, but the worry was that a mass uptake could impact financial stability. As well as the dollarization issue, they would become "quasi-banks" he said, as people will deposit money in a coin assuming they can take it out again whenever they want. They will also be used as a direct means of payment. "It could potentially destabilise the global payment system," he said. "I'm not so sure it's a good idea". ($1 = 0.8483 euros) Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Bloomberg
26-06-2025
- Business
- Bloomberg
Stablecoins Can 'Dollarize' The World: Consensys CEO
Ethereum Co-Founder and Consensys CEO Joe Lubin discusses stablecoins and says they can 'dollarize' the world and be a game changer for the US. He speaks with Sonali Basak and Tim Stenovec on 'Bloomberg Crypto.' (Source: Bloomberg)
The Independent
22-05-2025
- Business
- The Independent
Argentina's Milei unveils bold plan to lure billions in undeclared dollars back home
Argentina's government on Thursday unveiled an ambitious scheme to bring billions of undeclared U.S. dollars tucked under mattresses or stashed in foreign bank accounts back into the crisis-prone country, as libertarian President Javier Milei seeks to boost Argentina's low international currency reserves and stimulate the limping economy. By eliminating tax reporting requirements, the plan invites savers — who long have swapped their depreciating pesos for American currency in the country's underground market — to spend unreported dollars on everyday transactions at home. The government won't ask questions regarding the source of the repatriated funds, officials promised. 'Your dollars, your decision. What's yours is yours, not the state's,' Milei's presidential spokesperson, Manuel Adorni, said in a press conference announcing the policies. 'You can use them however you want, without having to prove where you got them from.' Milei — who ran on a controversial campaign pledge to 'dollarize' Argentina's troubled economy — wants a new gush of greenbacks to boost the volume of U.S. dollars in circulation. Although Argentina's depleted currency reserves sent Milei backpedaling from his initial campaign trail-fervor for 'burning down' the central bank and adopting the U.S. dollar as the national currency, these latest measures seek to hasten the country's transition to a new currency system that would see dollars gradually replacing pesos. Milei's 'endogenous dollarization' scheme would involve fixing the supply of the local currency even as Argentines could use dollars or pesos. He hopes this would encourage Argentines to use their dollar-denominated savings to buy houses and cars as the economy grows and more cash is needed in circulation. To lay the groundwork, Milei's government last year imposed a generous tax amnesty for Argentines willing to repatriate capital. In April, it lifted most currency controls as part of a $20 billion bail-out deal with the International Monetary Fund, which conditions its support on the government boosting its scarce foreign reserves. 'You can spend those dollars without anyone bothering you. So, you go, you want to buy, I don't know, a house for $200,000, no one has to ask you anything,' Milei told the TV channel of Argentine newspaper La Nacion in an interview Monday. Over decades of financial turmoil, Argentines have come to depend on U.S. dollars to evade a byzantine system of currency controls, hedge against hyperinflation and protect their nest eggs from government freezes, as has happened several times in the country's recent history, such as during the catastrophic 2001 foreign-debt default. 'This is how we reached a catastrophic outcome in which 50% of our economy ended up being informal, and the state, like Big Brother, controlled all of its citizens' transactions, as if they were criminals deserving of punishment,' Adorni said. Argentina's official statistics agency estimates that, as of late 2024, Argentine households and firms held more than $270 billion outside their financial system, largely denominated in U.S. currency. While most of the billions are in foreign bank accounts, a significant amount of cash is also stuffed under mattresses and floorboards and in rented safety deposit boxes in underground vaults across the country. 'Those who do this are not criminals,' Economy Minister Luis Caputo said Thursday. 'They are the vast majority of Argentines who have been abused by excessive taxes and controls. To encourage Argentines to spend their repatriated funds, the new measures scrap strict requirements for businesses and credit card providers to report citizens' purchases to ARCA, Argentina's equivalent of the IRS. They relax strict tax evasion rules so property buyers and public notaries won't need to report transactions. Banks won't be able to request access to clients' tax records. 'It sounds like an invitation not to pay taxes,' said Ignacio Labaqui, a Buenos Aires-based senior analyst at advisory firm Medley Global Advisors. That raises concerns about an injection of potentially dirty funds, some of which could be the product of illegal activity. Asked about the danger created by the new fiscal incentives, the IMF sounded a cautious note. 'The authorities have committed to strengthening financial transparency,' said Julie Kozack, an IMF spokesperson. 'Any new measures, including those that may be aimed at encouraging the use of undeclared assets, should be, of course, consistent with these important commitments.' ___
