- An IMF working paper by economist Brandon Joel Tan models how dollar stablecoins improve foreign currency access in fixed exchange rate regimes but can amplify currency runs during crises.
- Stablecoins create a visible high-frequency price for dollar demand that can signal scarcity and spur simultaneous moves out of local currency when official rates diverge from market rates.
- Real-world examples from Bolivia and Argentina show stablecoins already used for dollar access, while the Financial Stability Board warns about risks including currency substitution and circumvention of capital controls.
A new paper from the International Monetary Fund models how dollar stablecoins could improve foreign currency access in economies with fixed or heavily managed exchange rates while also amplifying currency runs during severe pressure. Written by economist Brandon Joel Tan, the working paper argues stablecoins make “dollar-like claims easier to access” while creating a visible, high-frequency price for dollar demand that can signal growing scarcity.
When a country’s official exchange rate strays far from the market rate, that stablecoin price can prompt many people to abandon the local currency simultaneously. The findings highlight that stablecoins help people access dollars when banks or official exchange channels cannot meet demand, but during a currency crisis the same widely watched price could trigger panic-driven transactions requiring temporary regulatory limits.
The paper’s argument reflects how stablecoins are already used in countries with restricted dollar access. On June 9, 2025, Bolivian airport retailers priced goods using USDT as a reference while still accepting US dollars or bolivianos.
In 2024, Argentines used underground “crypto caves” to exchange pesos for dollar stablecoins at rates closer to the unofficial market. The practice gave residents another way to preserve savings as the peso lost value and currency controls restricted dollar access.
While these uses highlight stablecoin benefits, regulators have warned about broader risks. On March 24, the Financial Stability Board said dollar stablecoins could expose emerging economies to currency substitution, weaker monetary policy, and the circumvention of capital-flow measures.
The FSB urged lawmakers to assess how the stablecoin sector develops to understand liquidity and operational risks as stablecoins interlink with the broader financial system.
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