Source: CritpoTendencia Original Title: How Cryptocurrencies Changed 21st Century Monetary Policy Original Link:

How Cryptocurrencies Changed 21st Century Monetary Policy

A silent but profound change.

Cryptocurrencies and stablecoins began as technological niches.

Today, they are transforming global money processes. Governments and central banks face a new challenge. They no longer have total control over the creation and flow of money.

The rise of stablecoins and their growing significance

Stablecoins are gaining ground as a medium of exchange and store of value. According to the Bank for International Settlements (BIS), their global capitalization exceeds hundreds of billions in 2025.

This significant rise is starting to compete with bank deposits. This competition threatens the traditional base of bank financing.

Why stablecoins weaken monetary control

According to the BIS, stablecoins do not meet three key requirements of sound money: uniqueness, elasticity, and integrity. They function as private instruments, not as money issued by a central bank. Therefore, they do not guarantee flexible liquidity in times of crisis or reliable institutional backing.

Additionally, their adoption can undermine the traditional transmission of monetary policy.

For example, many savers may prefer stablecoins over deposits. That reduces the base on which central banks control the money supply.

Effects on emerging countries and risks to monetary sovereignty

A Moody’s Ratings report warns that cryptoization can erode monetary policy in vulnerable economies.

If citizens adopt stablecoins or cryptos, central banks could lose control over exchange rates, inflation, and deposits.

This loss of control threatens macroeconomic stability, especially in contexts with institutional weakness or weak regulation.

What alternatives are central banks developing? CBDC and institutional tokenization

In response, many regulators are proposing central bank digital currencies (CBDC).

Additionally, the BIS suggests a hybrid system: tokenized fiat money, tokenized public and private assets, and consolidated reserves.

This framework seeks to combine efficiency, traceability, and institutional trust.

A recent study proposes a hybrid system where private stablecoins coexist with central bank money. This architecture allows for stability, liquidity, and regulatory control.

In this way, central banks could regain part of their role, albeit under new rules.

Interaction between traditional monetary policy and the crypto market

Not only stablecoins pressure the monetary system. Volatile cryptocurrencies also react to changes in traditional monetary policy.

For example, when a central bank raises rates, that shock will affect crypto assets and stablecoins differently. This creates a duality: monetary policy continues to influence, albeit less powerfully, part of digital money.

What does the change mean for the 21st century? A new monetary paradigm

Money no longer depends exclusively on central banks.

Stablecoins and private cryptocurrencies open a parallel layer of global liquidity. This new scenario erodes traditional monetary sovereignty.

To maintain control, regulators must respond. Regulation, CBDCs, and institutional tokenization seem to be key strategies.

The result: a hybrid, global, and diverse system. This system can offer efficiency, financial inclusion, and resilience… if it coexists with stability and supervision.

Conclusion: urgency of institutional adaptation

Cryptocurrencies and stablecoins are emerging as disruptive forces. They change who controls money, how it flows, and how it is regulated.

Central banks must reinvent their tools.

The 21st century demands clear policies, strong regulations, and hybrid frameworks. Otherwise, they will lose influence over global liquidity.