IMF Warns USD-Pegged Stablecoins Could Challenge Emerging Market Currencies

The International Monetary Fund’s December 2025 report, Understanding Stablecoins, cautions that the growing use of USD-pegged stablecoins could accelerate currency substitution and capital outflows in vulnerable emerging markets. According to the IMF, stablecoins offer a way to bypass traditional financial intermediaries and capital flow management measures, giving users the ability to move funds across borders quickly and outside regulated rails. Researchers note that crypto markets have already shown signs of facilitating capital flight, especially in regions facing inflation and currency instability.

USD-pegged stablecoins like USDT and USDC now hold a combined market capitalization of roughly $264 billion—comparable to the FX reserves of major economies. Their ease of access on public blockchains allows users worldwide to obtain digital dollar equivalents without relying on banks or formal FX procedures. In crisis scenarios, such as the 2013 taper tantrum, this kind of seamless, peer-to-peer transfer could theoretically magnify currency depreciation and weaken central bank control.

Still, experts argue that the stablecoin market remains far too small to spark systemic disruption. Analyst Noelle Acheson notes that although stablecoin supply has expanded from $5 billion in 2020 to nearly $300 billion, most of it is used for crypto trading rather than treasury or corporate payments. The scale of global USD markets—trillions in physical cash, reserves, and international liabilities—dwarfs stablecoin activity. Policy frictions, local regulations, and the not-yet-active GENIUS Act also limit their practical use in emerging markets.

Coinbase researcher David Duong adds that traditional macro forces such as bond redemptions, portfolio outflows, and NDF markets would continue to dominate during periods of financial stress. While IMF data shows stablecoin flows rising—particularly in Africa, Latin America, and the Middle East—they remain a small fraction of global payments. For now, their role in emerging-market stability is growing but not yet decisive.