IMF warns dollar‑stablecoins could trigger currency crises in fixed‑rate economies

The International Monetary Fund has released a working paper that finds dollar‑pegged stablecoins can both improve access to foreign currency and heighten the risk of rapid capital outflows in economies with tightly managed exchange‑rate regimes. Economist Brandon Joel Tan shows that stablecoins act as a transparent, continuously updated benchmark for dollar demand, which helps households and firms obtain dollars when official channels are constrained. However, when a country's official rate diverges sharply from the market, the same price signal can coordinate mass exits from the local currency, amplifying a currency run.

The paper cites recent practices in Bolivia, where airport retailers used USDT as a pricing reference, and in Argentina, where “crypto caves” allowed residents to swap pesos for stablecoins at near‑market rates. It concludes that regulators may need to impose temporary limits on large or panic‑driven stablecoin transactions during crises. The analysis aligns with warnings from the Financial Stability Board that widespread stablecoin adoption could undermine monetary policy, facilitate capital‑flow circumvention, and increase liquidity risks in emerging markets.