The International Monetary Fund (IMF) has published a new research report warning that dollar stablecoins could increase access to foreign currency in countries with tightly controlled exchange rates, while also increasing the risk of rapid currency outflows in times of crisis.
Stablecoins and exchange rate trends
The study, written by IMF economist Brandon Joel Tan, examines how stablecoins (virtual currencies pegged to the US dollar or other fiat currencies) are impacting parallel foreign exchange (FX) markets in economies where public access to the dollar is restricted.
Tan has developed a model to demonstrate that stablecoins provide an alternative source of funding for individuals and businesses whose needs cannot be met by banks or public exchanges. Access to this currency is particularly relevant in markets where fixed or tightly controlled exchange rates widen the gap between the official rate and actual demand for foreign currency.
Stablecoins are described as creating “accessible dollar-like claims,” with market prices acting as highly visible indicators of demand for dollars. If the official exchange rate deviates significantly from market reality, this visibility could indicate a severe dollar shortage and prompt a large-scale outflow of local currency.
The research report suggests that under stress, people lose confidence in their national currencies, and stablecoin price fluctuations can simultaneously cause currency collapses. Tan recommended that regulators consider imposing temporary restrictions on large-scale or panic-driven stablecoin transactions during the currency crisis to prevent unregulated outflows.
Mini Dictionary: Stablecoins. A digital asset designed to maintain stable value by pegging its price to a fiat currency such as the US dollar.
Actual usage example
Citing recent events in Latin America, the paper highlighted real-world applications where stablecoins are being used to circumvent strict currency controls. On June 9, 2025, a retailer at a Bolivian airport reportedly used the stablecoin USDT as a reference point for pricing goods, even though transactions remained settled in US dollars or the local Boliviano currency.
Argentines are also adopting stablecoins to protect their savings amid a depreciating peso and strict capital controls. In 2024, residents frequented so-called “cryptocurrency caves” (underground exchanges), where pesos were exchanged for dollar-backed stablecoins at rates much closer to the parallel market, providing an alternative way to access dollars outside of regulated channels.
Regulatory concerns and risks
Regulators around the world are cautiously responding to the growing use of stablecoins. The Financial Stability Board (FSB), the international body that oversees the global financial system, has warned that large-scale adoption of dollar stablecoins could increase risks for emerging markets. These risks include accelerated currency substitution, weakening of monetary policy, and avoidance of capital flow regulations.
The FSB called on policymakers to closely monitor the growth of stablecoins and assess the impact on liquidity and operational vulnerabilities, as stablecoin assets are increasingly intertwined with domestic and international financial systems.
As the stablecoin market continues to expand, it is expected that policymakers may increase oversight and develop frameworks to address potential impacts, particularly in economies with fixed or tightly controlled exchange rate regimes.
