IMF "Stablecoins accelerate currency substitution in vulnerable countries... concerns over weakening capital controls"

The International Monetary Fund (IMF) warned that the rapid growth of dollar-denominated stablecoins could accelerate currency substitution in countries with vulnerable monetary systems. It pointed out that easier cross-border movement of funds via stablecoins could weaken central banks' ability to manage capital flows.

In the 'Understanding Stablecoins' report released on the 4th (local time), the IMF said, "Stablecoins can circumvent capital controls, increasing the volatility of capital flows and risking fragmentation of payment systems," and added, "The risks are especially greater in countries with high inflation, weakened institutional trust, and low confidence in monetary policy."

The IMF explained that the market capitalization of major stablecoins such as USDT·USDC tripled since 2023 to a total of $260 billion, and that trading volume in 2024 exceeded $23 trillion. According to the report, Asia is currently the largest region for stablecoin activity worldwide, while Africa, the Middle East, and Latin America have high usage relative to GDP, making the risk of currency substitution relatively large.

However, the IMF also assessed that stablecoins could expand financial access if they have appropriate regulatory and legal frameworks. It noted that in developing countries, mobile-based financial services spread faster than traditional banking infrastructure, and explained that positive effects such as increased competition, reduced payment costs, and expansion of the digital financial ecosystem may also occur.

At the same time, the IMF identified the risk of stablecoin collapse as a key risk. If an issuer loses credibility due to a decline in reserve asset value or redemption concerns, large-scale redemption requests could occur, forcing the sale of reserve assets and causing shocks across financial markets. It also warned that the anonymity-based nature of cross-border transactions makes it difficult to enforce capital controls and prevent illicit finance, and that difficulty in identifying holder distribution can hinder crisis response and policy decisions.