The global race to regulate stablecoins is picking up speed. However, two critical issues still cloud the path forward, according to Bo Li, Deputy Managing Director at the International Monetary Fund (IMF).
Speaking at the World Economic Forum’s Summer Davos event, Li underscored unresolved questions surrounding the classification of stablecoins — a dilemma that could significantly shape their future regulation.
As reported by Chinese financial outlet Caixin, Li highlighted that while countries across the U.S., Europe, and Asia have made notable strides in developing regulatory frameworks for stablecoins, a core issue remains: how should these digital assets be classified? Are they monetary currencies or financial assets akin to stocks, gold, or bonds?
“Currently, a large number of digital currency or stablecoin regulatory experiments and explorations are being carried out around the world,”
said Bo Li in his statement at the Summer Davos 2025.
Li further explained that if stablecoins are categorized as currency, governments would need to determine whether they fall under narrow money (M0) or broader money (M2) classifications — a distinction that directly affects how issues such as anti-money laundering (AML) controls and liquidity buffers are enforced.
“But this is just the starting point. There are still many problems to be solved and global consensus needs to be further consolidated,”
said the IMF Deputy Managing Director.
His comments come at a time when the global regulatory landscape is shifting rapidly. The United States recently passed the Genius Act, a landmark bill offering regulatory clarity for USD-backed stablecoins. Hong Kong has followed suit, with its Stablecoin Ordinance set to take effect on August 1, 2025.
The IMF has noted a ripple effect from these developments, with increased pressure on countries such as Russia, South Korea, and China to accelerate their own stablecoin legislation to remain competitive.
With stablecoins poised to play a larger role in the financial ecosystem, Li’s remarks highlight the urgency for clearer, unified rules — and a shared understanding of what stablecoins truly represent in the modern economy.
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