The dollar’s new rails: what stablecoins are doing to payments, currencies and central banks
ABSTRACT
Stablecoins have become a question of international monetary order. New IMF research by Marco Reuter, built from public blockchain data, shows a payments network centred on emerging markets. Transfers topped $7 trillion in 2025, yet they are still under 1% of global cross-border payments. In fragile economies, stablecoins appear to have become a vehicle for dollarisation: activity rises after capital outflow controls, holdings jump after currency crises, and both persist. A BIS–Bundesbank model suggests stablecoins slightly amplify monetary policy in the US. A European Parliament study warns they could blunt it in countries that adopt dollar stablecoins.
Stablecoins are crypto assets “designed to maintain a stable value against a reference asset, predominantly the US dollar” (Hofmann et al., 2026). In practice, they are privately issued money that can be exchanged one-for-one (“at par”) for more established forms of money (oftentimes US dollars), and they are backed by low-risk assets to meet redemptions and protect their value. Unlike central bank’s money, a stablecoin stays stable only as long as its issuer can promptly honour redemption requests, which is why the assets behind it, mostly short-term US Treasury bills, matter so much.
For most of their short life, stablecoins were a small part of crypto trading. Since the US passed the GENIUS Act in July 2025, the debate has moved, as IMF economist Marco Reuter puts it, from their role in crypto markets “to their potential implications for the international monetary system” (Reuter, 2026). Also US Treasury Secretary Scott Bessent described stablecoins as giving the dollar “an internet-native payment rail”.
Nevertheless, the increased importance of stablecoins into the international monetary market is not risk-free: the Bank for International Settlements has warned of a “stealth dollarisation” in emerging economies (BIS, 2025) as more and more agents in developing countries prefer to use stablecoins over local currency, generating some sort of American “cryptomercantilism”.
1. Payments: a parallel network, built in the South
The first problem with stablecoins has been that they escape official statistics. Balance-of-payments figures “do not capture wallet-based, pseudonymous, cross-border flows” (Cecchetti et al., 2026). A recent paper (Reuter, 2026) tries to overcome this problem and explore the cross-country movements of stablecoins. Every stablecoin transfer is recorded on a public blockchain, but only as an anonymous wallet address. Reuter infers the country behind each wallet with machine learning: the hours a wallet is active, whether its activity shifts with daylight-saving time, which exchanges it uses. The resulting panel covers two major stablecoins: USDT (also known as Tether) and USDC in 188 countries, with $21.4 trillion of transfers between 2018 and 2025.
Reuter estimates that transfers exceeded $7 trillion in 2025, up from $1.2 billion in 2018, and that about 90% crossed borders. This is still less than 1% of global cross-border payments and the median transfer is only $300, closer to a remittance than to a corporate treasury operation. Consistent with earlier BIS work (Auer et al., 2025), flows are larger where traditional remittances are more expensive.
Most strikingly, the geography is inverted. According to IMF data, 85% of the volume processed by SWIFT moves between advanced economies. In stablecoins, Reuter estimates that only 14% does, while flows between emerging and developing economies are the largest corridor, at about a third of the total. They are building a dollar network where the banking system is thin, expensive or unreliable.
2. Dollarisation: the old story, on a new rail
Reuter estimates that emerging and developing economies’ holdings more than tripled since end-2021, to about $150 billion. That is roughly three quarters of the ~$200 billion his panel covers. Relative to GDP, Venezuela (5.6%) and Ukraine (4.1%) lead, against 0.04% in the US, highlighting these new monetary assets also as insurance against political instability.
Reuter tracks 217 activations of capital flow management measures: after countries tighten restrictions on capital outflows, their cross-border stablecoin activity rises by roughly 30% within six months, relative to comparable countries, and stays there. When the restrictions are lifted, activity does not detectably fall back. In 21 countries that entered a currency crisis between 2021 and 2025, stablecoin holdings rose by about $7.9 billion over the following year. That is roughly 75% of what they held before the crisis, and the holdings then level off rather than revert.
Stablecoins appear to have become a vehicle for dollarisation. The dollar amounts are still moderate: the median crisis economy saw an increase of only about $59 million. And the data show where money moves, not why.
For Europe, van ’t Klooster, Martino and Monnet (2025) argue that the EU’s MiCA (Markets in Crypto-Assets) regulation provides adequate safeguards against the digital dollarisation of the euro area. As non-compliant foreign stablecoins cannot be offered to the public, large issuers face stricter reserve rules, and authorities can halt foreign-currency stablecoins, making them less attractive. The real exposure lies in countries with low levels of financial inclusion and unstable currencies. Nevertheless, as dollar-based stablecoins increase their importance in settling transactions across borders, this may undermine the increasing role of the euro as international means of payment and weaken the euro’s global standing. This risk may lessen once interoperable central bank digital currencies and fast payment systems across borders are implemented.
3. Monetary policy: a sharper lever at home, a blunter one abroad
The increased importance of crypto (including stablecoins) may also have important effect on monetary policy as we know it and in particular on the so-called “transmission”, i.e. how (and how much!) central banks decision affect agents behaviour and ultimately country’s fundamentals such as inflation or GDP.
The effect of stablecoins on monetary policy transmission depends fundamentally on “which side” of the peg one is. In the issuing country, according to Hofmann et al. (2026), stablecoins work through two opposing channels. Through the bank lending channel, households shift liquid savings from bank deposits into stablecoins, thus increasing banks’ need for liquidity and therefore their cost of funding. Ultimately, this makes bank credit more expensive. Through the fiscal space channel, stablecoin issuers’ demand for Treasury bills lowers government borrowing costs. In their model, with $2 trillion in stablecoins, T-bill yields fall by around 25 basis points while deposit rates rise by around 4. Long-run output ends up about 0.03% lower, a very small effect which is very close to an exact offset between the two channels.
On transmission, the authors find that stablecoins amplify monetary policy. With more liquid assets in households’ hands, deposit rates follow the policy rate more closely, so the same rate hike tightens credit and output more sharply.
Moreover, when foreign users hold a large share of the stock, US output rises, because the Treasury bills get the demand while US banks keep their deposits. By the same mechanism, this also implies that in an economy where stablecoins are held domestically yet issued abroad and backed by foreign assets, output falls considerably. Competition for deposits persists, while the demand for reserve assets benefits foreign governments (i.e. the governments of the currency to which the stablecoin is pegged to). The consequences for an economy using foreign stablecoins differ drastically from those for the issuing economy.
In the adopting country, if dollar-pegged stablecoins circulate widely, swings in the dollar could undermine the effectiveness of domestic monetary policy, or push the central bank toward a de facto dollar peg (van ’t Klooster et al., 2025). An increased diffusion of USD-denominated stablecoins would let the Fed gain a slightly sharper tool and a cheaper source of funding. Central banks in the “periphery” (emerging markets) may find their own tools blunted.
Stablecoins are not yet large enough to reshape global finance, but the evidence suggests they are already changing where dollars flow and who holds them, and those shifts appear hard to reverse. How far this goes will be decided less by technology than by regulation: by what backs these coins, who may issue them, and whether other jurisdictions build alternatives of their own.
References
Auer, R, U Lewrick and J Paulick (2025), “DeFiying gravity? An empirical analysis of cross-border Bitcoin, Ether and stablecoin flows”, BIS Working Papers No. 1265.
BIS – Bank for International Settlements (2025), “The next-generation monetary and financial system”, Annual Economic Report 2025, Chapter III.
Cecchetti, S, D Niepelt, H Rey and X Vives (2026), Digital Money, The Future of Banking 8, CEPR Press.
Hofmann, B, M Kaldorf and M Rottner (2026), “The macroeconomics of stablecoins”, BIS WP 1363; and VoxEU column, 2 Nov 2026.
Reuter, M (2026), “International stablecoin flows, capital controls and currency crises”, IMF WP/26/211; and VoxEU column, 31 Oct 2026.
van ’t Klooster, J, E Martino and E Monnet (2025), “Cryptomercantilism vs. Monetary Sovereignty”, European Parliament ECON study PE 760.274; and VoxEU column, 3 Jul 2025.
