Analysts of the Bank for International Settlements (BIS) concluded that the rapid growth of U.S. dollar stablecoins in emerging markets poses risks to monetary policy and reduces the effectiveness of traditional foreign exchange controls.
BIS published a study examining the impact of stablecoins on the monetary systems of emerging market and developing economies. The authors compared the historical dollarization of bank deposits with the current spread of U.S. dollar stablecoins. They concluded that both trends stem from similar underlying factors, but digital assets are significantly more difficult to regulate.
The researchers analyzed historical data on foreign currency deposits across more than 130 economies from 1990 to 2019, along with Chainalysis data on cross border USDT and USDC flows across 184 countries from 2017 to 2024. They selected these assets because they account for more than 80% of the global stablecoin market. According to the analysts, they are becoming a new way for residents of developing countries to access U.S. dollar liquidity, similar to foreign currency deposits but independent of banking infrastructure. The study measured stablecoin adoption using gross cross border inflows relative to GDP.
The study found that stablecoin adoption and deposit dollarization are driven by similar macroeconomic factors. Demand for U.S. dollar stablecoins and foreign currency deposits increased in countries where rapid currency depreciation accelerated inflation, as well as during financial crises. Banking crises proved to be an especially strong driver of stablecoin demand, as users viewed them as an alternative to the banking system.
The study also found that once dollarization begins, reversing the process is extremely difficult. Historical data showed that both foreign currency deposits and stablecoin adoption exhibit strong persistence and continue even after macroeconomic conditions improve.
At the same time, the analysts concluded that traditional foreign exchange controls have little effect on stablecoin adoption. While restrictions on opening foreign currency accounts significantly reduced the share of foreign currency deposits, restrictions on stablecoin transactions showed no statistically significant impact on cross border digital asset flows. The researchers attributed this to the fact that stablecoins circulate on public blockchain networks and can be used outside the regulated banking sector.
The analysis also pointed to mixed effects of dollarization on inflation risks. Moderate dollarization was associated with a higher probability of accelerating inflation, while economies with very high levels of dollarization showed the opposite pattern, with lower inflation risks due to imported confidence in the anchor currency. At the same time, the authors found no compelling evidence that dollarization significantly reduces the effectiveness of monetary policy.
According to BIS analysts, the findings highlight 2 key policy priorities for emerging market economies:
- Maintaining macroeconomic stability to prevent further dollarization.
- Revising existing foreign exchange regulatory frameworks, as traditional capital control measures are considerably less effective when applied to digital assets.
BIS analysts also emphasized that it’s still too early to draw definitive conclusions because the stablecoin market continues to evolve rapidly, while the available statistical data remains limited.
In June 2026, adjusted stablecoin transaction volume reached $1.79 trillion, and BIS analysts warned that the widespread adoption of stablecoins could create new macrofinancial risks. Read more about the stablecoin market in the first half of 2026 in CP Media’s special research report.
