{
  "title": "Navigating a Financially More Fluid World — Remarks by Kristalina Georgieva, IMF Managing Director, at the Jackson Hole Economic Policy Symposium; August 28, 2026",
  "publication": "IMF News, August 28, 2026",
  "sourceUrl": "https://www.imf.org/en/news/articles/2026/08/28/sp082826-md-navigating-a-financially-more-fluid-world",
  "canonical": "https://www.imf.org/en/news/articles/2026/08/28/sp082826-md-navigating-a-financially-more-fluid-world",
  "overlayPath": "/en/news/articles/2026/08/28/sp082826-md-navigating-a-financially-more-fluid-world/index.md",
  "summary": "At the Jackson Hole Economic Policy Symposium, IMF Managing Director Kristalina Georgieva discussed how stablecoins, tokenization, and financial innovation could create a more fluid global financial system, and outlined the policies needed to manage risks and safeguard financial stability.",
  "publishDate": "2026-08-28",
  "sections": [
    {
      "heading": "Overview and framing",
      "content": "- Speech focus: how stablecoins, tokenization, and financial innovation could create a more fluid global financial system and the policies needed to manage risks and safeguard financial stability.\n- Key premises:\n  - Historical context: financial innovation since the 1980s has improved domestic payments—speed, ease, cost—with egalitarian effects benefiting poor people and poor countries.\n  - Cross-border payments remain uneven: transactions often too costly and too slow.\n  - Two reasons for prioritizing more efficient cross-border payments:\n    - Restrictions on correspondent banking and high transaction costs limit economic participation and can divert payments to informal channels.\n    - More efficient cross-border payments can boost growth prospects in a world where cross-border trade in digital services (e.g., AI) may be pivotal.\n- Ongoing projects cited as promising connectors of national payment systems: ECB’s TIPS; ASEAN’s Project Nexus; Southern African Development Community’s TCIB; BIS’s Project Agora.\n- Central question: can private-sector innovation—especially distributed ledger technology, tokenization, and stablecoins—deliver systemic transformation of cross-border payments?"
    },
    {
      "heading": "Major findings on financial innovation and systemic implications",
      "content": "- Potential positive effects:\n  - Tokenization and stablecoins could “fluidify” global finance, making large-value cross-border payments cheaper and faster.\n  - Competition spurred by innovation can push banks to upgrade services and extend benefits widely.\n- Risk dynamics in a more fluid system:\n  - Faster transmission of risks and larger penalties for policy error.\n  - Operational risks transform as tokenization automates margin calls and back-office functions—reaction times shrink.\n  - Trust is central for stablecoins: redeemability at par in all states of the world.\n  - Risk of excessive bank disintermediation, which could raise funding costs and impair economy-wide credit, given banks’ role as main lenders to households and SMEs.\n  - Migration of activity to less-regulated nonbank space increases regulatory complexity; anonymity and non-traceability in some payment systems have emerged.\n- Specific macro-relevant challenges linked to stablecoins:\n  - Vehicle for tax evasion, reducing tax revenue.\n  - Promotion of currency substitution, impairing monetary policy transmission.\n  - Increased porosity of capital controls—complicating the roughly one-quarter of IMF membership that still shields itself behind capital controls, and the subset relying on financial repression."
    },
    {
      "heading": "Policy requirements and recommendations — financial regulation and international cooperation",
      "content": "- Central regulatory goal: keep up with innovation to prevent problems while allowing positive change and fair competition.\n- Specific policy prescriptions:\n  - Strict rules on reserve pools for stablecoins to ensure safety and liquidity, ideally harmonized internationally to support a single, recognizable asset class.\n  - Similar norms for similar financial instruments to guarantee fair competition and limit incentives for regulatory arbitrage.\n  - Modernize regulatory frameworks to bring large volumes of financial activity out of less-regulated nonbank spaces.\n  - Supervisory actions by central banks to ensure a sound domestic banking system and appropriate regulation of domestic stablecoin intermediaries.\n- International cooperation needs:\n  - Gather and share data.\n  - Align national legal and regulatory frameworks.\n  - Secure inter-operability of different cross-border payments channels.\n  - Reduce contagion risks."
    },
    {
      "heading": "Policy requirements and recommendations — emerging market and developing countries",
      "content": "- Challenges and recommended responses:\n  - Increase foreign exchange buffers.\n  - Maintain strict policy discipline.\n  - Undertake fundamental fiscal adjustment: broaden tax bases and deliver smaller primary deficits.\n  - Strengthen supervisory regulation of domestic stablecoin intermediaries.\n- Rationale:\n  - Perforation of capital controls exposes countries to currency substitution risks, capital flow volatility, exchange rate instability, and reduced monetary sovereignty.\n  - As financial repression becomes harder to rely on, governments must pursue credible fiscal consolidation to preserve trust in local currency.\n- Observations on resilience:\n  - Many emerging markets have strengthened policy frameworks and institutions—fiscal rules and independent central banks—building resilience.\n  - Political economy constraint: public appetite for consolidation may be low after years of generous fiscal support; delaying consolidation would be costly."
    },
    {
      "heading": "Policy requirements and recommendations — issuer countries, fiscal discipline, and global spillovers",
      "content": "- Definition and stakes:\n  - “Issuer countries” are those that issue reserve assets to back stablecoins; the U.S. is identified as the dominant provider of stablecoin backing.\n  - Issuer countries have a self-interest in system design that limits adverse spillovers and safeguards the international monetary system.\n- Quantified point:\n  - Ken Rogoff’s estimate cited: a worldwide stock of dollars outside the U.S. estimated at some $15 trillion.\n- Potential effects and limits:\n  - Dollar-backed stablecoins may help issuer countries tap a broader global investor pool and, other things equal, reduce fiscal funding costs—only on the margin.\n  - Possible adverse effect: higher borrowing costs in other countries if investors substitute away from their bonds.\n  - Savings from broader investor access are not a substitute for responsible macroeconomic policy.\n- Fiscal pressures and monetary policy interaction:\n  - Example: U.S., French, and Japanese 10‑year sovereign bond yields are currently at their highest levels since 2007, 2008, and 1996 respectively.\n  - Rising benchmark borrowing costs lift global yield curves and can more than fully offset spread compression in some emerging markets.\n  - Central banks must prioritize price stability; there is “little room for anything but a rock-solid commitment to price stability.”\n  - Warning against “monetary policy cowboys” riding to the fiscal rescue via lower-than-optimal policy rates or new asset purchase programs.\n- Imperative: fiscal heavy lifting—difficult choices between lower primary expenditures and higher taxes to deliver credible medium-term fiscal consolidation. “Delay no longer.”"
    },
    {
      "heading": "Conclusion",
      "content": "- Technology tends to stitch fragmented worlds together; examples cited: air travel, the internet, GPS.\n- While sweeping transformation of cross-border payments has not yet occurred, economic logic suggests it will; policy must create the right conditions to reap benefits and manage risks.\n- Final optimistic note: financial innovations can benefit people everywhere by increasing financial and economic freedom and incentivizing better policies.\n- Closing: “Thank you and back to you, Kristin.”\n\nAs prepared for delivery on August 28, 2026 — Remarks by Kristalina Georgieva, IMF Managing Director.\n\n---\n\n\n References\n\n- https://www.imf.org/en/about/senior-officials/bios/kristalina-georgieva\n- https://www.imf.org/-/media/images/imf/bios/mds/kristalina-georgieva-md-2026-lg.jpg\n- Speeches\n- PRESS CENTER\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2026/08/28/sp082826-md-navigating-a-financially-more-fluid-world"
    }
  ],
  "bullets": [
    "[Markdown version](/en/news/articles/2026/08/28/sp082826-md-navigating-a-financially-more-fluid-world/index.md)",
    "[Structured JSON version](/en/news/articles/2026/08/28/sp082826-md-navigating-a-financially-more-fluid-world/index.json)",
    "[Bundle manifest](/en/news/articles/2026/08/28/sp082826-md-navigating-a-financially-more-fluid-world/bundle-manifest.json)",
    "Published: August 28, 2026",
    "Speech focus: how stablecoins, tokenization, and financial innovation could create a more fluid global financial system and the policies needed to manage risks and safeguard financial stability.",
    "Key premises:",
    "Ongoing projects cited as promising connectors of national payment systems: ECB’s TIPS; ASEAN’s Project Nexus; Southern African Development Community’s TCIB; BIS’s Project Agora.",
    "Central question: can private-sector innovation—especially distributed ledger technology, tokenization, and stablecoins—deliver systemic transformation of cross-border payments?",
    "Potential positive effects:",
    "Risk dynamics in a more fluid system:",
    "Specific macro-relevant challenges linked to stablecoins:",
    "Central regulatory goal: keep up with innovation to prevent problems while allowing positive change and fair competition.",
    "Specific policy prescriptions:",
    "International cooperation needs:",
    "Challenges and recommended responses:",
    "Rationale:",
    "Observations on resilience:",
    "Definition and stakes:",
    "Quantified point:",
    "Potential effects and limits:",
    "Fiscal pressures and monetary policy interaction:",
    "Imperative: fiscal heavy lifting—difficult choices between lower primary expenditures and higher taxes to deliver credible medium-term fiscal consolidation. “Delay no longer.”",
    "Technology tends to stitch fragmented worlds together; examples cited: air travel, the internet, GPS.",
    "While sweeping transformation of cross-border payments has not yet occurred, economic logic suggests it will; policy must create the right conditions to reap benefits and manage risks.",
    "Final optimistic note: financial innovations can benefit people everywhere by increasing financial and economic freedom and incentivizing better policies.",
    "Closing: “Thank you and back to you, Kristin.”",
    "[https://www.imf.org/en/about/senior-officials/bios/kristalina-georgieva](https://www.imf.org/en/about/senior-officials/bios/kristalina-georgieva)",
    "[https://www.imf.org/-/media/images/imf/bios/mds/kristalina-georgieva-md-2026-lg.jpg](https://www.imf.org/-/media/images/imf/bios/mds/kristalina-georgieva-md-2026-lg.jpg)",
    "[Speeches](https://www.imf.org/en/news/searchnews)",
    "[PRESS CENTER](http://presscenter.imf.org/)",
    "[https://www.imf.org/en/home](https://www.imf.org/en/home)"
  ],
  "alternates": {
    "markdown": "/en/news/articles/2026/08/28/sp082826-md-navigating-a-financially-more-fluid-world/index.md",
    "json": "/en/news/articles/2026/08/28/sp082826-md-navigating-a-financially-more-fluid-world/index.json",
    "bundleManifest": "/en/news/articles/2026/08/28/sp082826-md-navigating-a-financially-more-fluid-world/bundle-manifest.json"
  },
  "generatedAtUtc": "2026-09-26T04:51:35.803Z"
}