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Federal Reserve study: Stablecoins may hinder government control during currency crises
Research from the Federal Reserve Bank of New York indicates that stablecoins may undermine a government's ability to manage currency crises. By analyzing nine financial crises across eight countries—including Argentina, Turkey, Russia, Nigeria, and Iran—between 2021 and 2025, researchers found that demand for dollar-pegged stablecoins increases when local financial systems face heavy pressure.
Specifically, wallets linked to countries in crisis showed a 1.8 percent higher probability of receiving stablecoins during the week of the crisis. Two weeks after the onset of a crisis, the likelihood of these wallets sending stablecoins increased by 1.3 percent. This trend suggests that stablecoins provide a digital route for capital flight that is difficult for national authorities to restrict, potentially making the Mundell-Fleming trilemma more rigid by reducing a government's capacity to maintain independent monetary policy.
Separately, market data shows a recovery in stablecoin supply. After several months of contraction, the total amount of stablecoins in circulation has risen to approximately 304 billion dollars. Analysts from Wu Blockchain noted that the combined supply of USDT and USDC grew by roughly 1.7 billion dollars during August.
Entities
Circle · Ethereum Name Service · Federal Reserve Bank of New York · Tether · Wu Blockchain
Claims
What the coverage asserts, and how many sources carry each claim.
- [○ 1 SOURCE] The total supply of stablecoins in circulation is estimated at 304 billion dollars. cryptoast.fr
- [○ 1 SOURCE] The combined supply of USDT and USDC grew by approximately 1.7 billion dollars in August. cryptoast.fr
- [○ 1 SOURCE] Wallets linked to countries in crisis showed a 1.8 percent higher probability of receiving stablecoins during the week of the crisis. newsbit.nl
- [● 2 SOURCES] Stablecoins may hinder a government's ability to manage future currency crises. newsbit.nl · livecoins.com.br
- [○ 1 SOURCE] Stablecoin adoption increases capital flight pressure and makes the Mundell-Fleming trilemma more rigid. livecoins.com.br
- [● 2 SOURCES] Demand for digital dollars rises during periods of banking, local currency, or financial system instability. newsbit.nl · livecoins.com.br
- [○ 1 SOURCE] The probability of wallets sending stablecoins increased by 1.3 percent two weeks after a crisis began. newsbit.nl