However, the volatility of cryptocurrency can be detrimental to financial stability
You can go for better one like bitcoin. Altcoins are more volatile and not worth holding. People holding bitcoin that is more volatile see the value of their asset (bitcoin) increasing. But the fiat that is less volatile, people holding it see the value of their fiat decreasing. One of the reasons the developing countries bitcoin adoption is increasing is because of the inflation experienced by people there.
the rise of cryptocurrencies in developing countries poses threats to financial stability, domestic resource mobilization, and the security of monetary systems.
How is it a threat to financial stability, domestic resource mobilization and the security of monetary systems? These are all misconceptions.