Study: Stablecoins make Fed act as global retail bank, affecting central banks under 'impossible quartet'.

A recent paper by Sei Labs explores the global impact of dollar-pegged stablecoins by showcasing how they effectively transmit U.S. monetary policy worldwide. This phenomenon creates a complex challenge for central banks, known as the 'impossible quartet,' as they struggle to balance exchange rates, interest rates, monetary independence, and financial stability. The paper delves into the intricate dynamics of stablecoins and highlights the far-reaching influence they have on the global economy. This research sheds light on the significant role stablecoins play in shaping monetary policies across borders.