ContextRemarks at the Jackson Hole Economic Policy Symposium, the yearly gathering of central bankers; the IMF advises and lends to its 191 members to keep the global economy stable.
Why it mattersWarns that stablecoins and tokenization will speed the spread of risks, asks for coordinated rules and larger reserves in emerging markets, and tells governments not to leave fiscal repair to central banks.
- Cross-border payments stay slow and costly, which holds back poorer economies.
- Stablecoins could erode bank deposits, tax revenue and monetary control in emerging markets.
- Rising public debt and bond yields in big economies push pressure onto central banks.
- Coordinate international rules on tokenization and on stablecoin reserves.
- Emerging markets should hold larger currency buffers and keep strict policy discipline.
- Governments should deliver credible medium-term fiscal consolidation.
Read the speech summary
1. Why payments matter, and what is new
Speaking at Jackson Hole, Managing Director Kristalina Georgieva argued that faster and cheaper cross-border payments are worth pursuing because high costs and curbs on correspondent banking push activity into informal channels and hold back trade in digital services, including AI. Domestic payment innovation has already helped poorer households, but cross-border progress is uneven. Many projects now link national systems, from the ECB's instant-payment platform to schemes in Southeast Asia and southern Africa and a project at the BIS. Whether private ledger technology can transform this at global scale is unknown, yet tokenization and stablecoins may make global finance more fluid, spreading risks faster and raising the price of policy mistakes.
2. Regulation must be coordinated
Her first argument is that these instruments need an internationally coordinated response: strict and ideally harmonized rules on reserve pools so coins can always be redeemed at par, the same rules for similar instruments to limit arbitrage, protection against excessive loss of bank deposits since banks fund households and small firms, and modernization where activity has drifted to lightly regulated nonbanks. Cooperation on data, legal frameworks and interoperability is essential.
3. Emerging markets need stronger buffers
Stablecoins can facilitate tax evasion, currency substitution and leakage around capital controls, which still shield about a quarter of IMF members, some of which also rely on financial repression. Central banks should supervise domestic stablecoin intermediaries and build larger foreign exchange reserves, while governments broaden tax bases and cut primary deficits, even though appetite for consolidation is weak after generous support.
4. Issuer countries and fiscal discipline
Countries whose assets back stablecoins, above all the United States, can tap a pool of roughly fifteen trillion dollars held abroad and may lower funding costs, perhaps at others' expense, but such savings are marginal and no substitute for sound policy. Benchmark yields in the United States, France and Japan are at multi-decade highs and lift curves worldwide. Central banks must protect price stability and not rescue public finances through lower rates or asset purchases; the remaining answer is fiscal choice between lower spending and higher taxes, without further delay.
5. Closing note
Technology tends to knit a fragmented world back together, and she is confident cross-border payments will eventually change, provided the right conditions are set to capture the benefits and manage the risks.