Dollar Stablecoins Propose 88% Model for Dollar Procurement

A discussion at the Jackson Hole annual meeting suggested that dollar stablecoins could strengthen the dollar-centric international monetary order. Professor Eswar Prasad presented a paper titled "Financial Innovation and the International Monetary System," arguing that payment innovations could increase dollar borrowing among emerging market firms. According to the paper, the share of dollar reserves in foreign exchange has decreased from 72% in 2000 to 57% in the first quarter of 2026, yet the relative dominance of the dollar remains intact. The model results indicate that without stablecoins, the dollar procurement rate for emerging market firms was 36%, but this figure increased to 88% with the presence of stablecoins. Stablecoins are cryptocurrencies linked to fiat currencies or the value of specific assets, used for exchange settlements and on-chain remittances. The paper warns that stablecoins could become a liquidity channel in the international monetary system, potentially increasing financial market volatility. The Bank for International Settlements predicts that the market capitalization of stablecoins will reach approximately $320 billion by 2026. The difference between the 36% and 88% figures presented in the paper is based on model results, and further validation is needed to assess their actual market impact.

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