The Macroeconomic Impact of Cryptocurrency and Stablecoins

The report evaluates the macroeconomic effects of cryptocurrencies and fiat-backed stablecoins, focusing on financial stability, equity, innovation, and sustainability. It analyzes four regulatory scenarios for cryptocurrencies (continuing trends, banning, regulating, or making them legal tender) and three for stablecoins (continuing trends, regulating, or banning/taxing). The analysis concludes that allowing both to play a regulated role in the economy provides the highest net macroeconomic benefit. The document highlights risks such as market contagion, 'death spirals' in algorithmic stablecoins, and the energy intensity of Proof of Work mechanisms, while noting potential benefits in financial inclusion for marginalized groups and efficiency gains in payments.

• The report concludes that the optimal regulatory path for both cryptocurrencies and fiat-backed stablecoins is to allow them to play a regulated role in the economy, as this is predicted to bring the "highest macroeconomic net benefit to society."
• Cryptocurrencies pose risks to monetary stability because they lack a central authority to manage money supply, which could potentially lead to "runaway inflation" or a state of "hyperinflation" if many digital currencies circulate without supply limits.
• The report identifies significant financial stability risks, noting that crypto-asset markets are interconnected with traditional financial systems and that abrupt value decreases can cause a "loss of investor confidence," amplifying broader market corrections.
• In emerging markets and developing economies (EMDEs), cryptocurrency adoption is often driven by "unsound local macroeconomic policies or inefficient payment systems," leading residents to seek safer stores of value through asset substitution.
• Fiat-backed stablecoins face specific risks including "custodial risk" (issuer absconding with funds), "run risk" (redemptions exceeding liquid reserves), and "systemic risk" through crypto derivatives.
• The report notes that while some people of color use cryptocurrency to bypass discriminatory mainstream banking systems, they are also at a "highest risk of losing all of their life savings" due to volatility and a lack of consumer protection.
• The Proof of Work (PoW) consensus mechanism used by Bitcoin and Ethereum is described as "energy-intensive by design," though a transition to Proof of Stake (PoS) could reduce Ethereum's energy use by over 99%.
• The adoption of bitcoin as legal tender in El Salvador was intended to reduce remittance costs and move away from dollarization, but the report suggests that the "volatility of the dollar is low, while bitcoin has huge volatility," making local adoption difficult.
• A critical data gap exists because cryptocurrency and stablecoins are currently "excluded from monetary financial statistics," which hinders the ability of central banks to make accurate monetary policy decisions.

APA

World Economic Forum (2022). The Macroeconomic Impact of Cryptocurrency and Stablecoins. https://www3.weforum.org/docs/WEF_The_Macroeconomic_Impact_of_Cryptocurrency_and_Stablecoins_2022.pdf

Chicago

World Economic Forum. The Macroeconomic Impact of Cryptocurrency and Stablecoins. 2022. https://www3.weforum.org/docs/WEF_The_Macroeconomic_Impact_of_Cryptocurrency_and_Stablecoins_2022.pdf.

Wikipedia

{{cite report |author=World Economic Forum |title=The Macroeconomic Impact of Cryptocurrency and Stablecoins |date=July 2022 |url=https://www3.weforum.org/docs/WEF_The_Macroeconomic_Impact_of_Cryptocurrency_and_Stablecoins_2022.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{worldeconomicforum2022macroeconomic, author = {{World Economic Forum}}, title = {{The Macroeconomic Impact of Cryptocurrency and Stablecoins}}, institution = {World Economic Forum}, year = {2022}, month = jul, url = {https://www3.weforum.org/docs/WEF_The_Macroeconomic_Impact_of_Cryptocurrency_and_Stablecoins_2022.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }