Moody’s Warns of Crypto Adoption Risks in Emerging Markets

Cryptocurrency adoption in emerging markets threatens monetary sovereignty and financial resilience, according to a new report from Moody's Ratings. The risks intensify when digital assets MOVE beyond speculative investment into everyday use cases like savings and remittances.

Stablecoins pegged to the U.S. dollar present particular challenges, weakening monetary policy effectiveness as transactions increasingly occur outside domestic currencies. "This creates 'cryptoization' pressures analogous to unofficial dollarization, but with greater opacity," analysts noted.

Emerging markets in Southeast Asia, Africa, and Latin America show the highest crypto ownership rates. Inflationary pressures, currency instability, and limited banking access drive adoption in these regions. Meanwhile, pseudonymous wallets and offshore exchanges enable new channels for capital flight, further undermining economic stability.