The Worldwide Financial Fund’s (IMF) December 2025 report warns that USD-pegged stablecoins might spark forex substitution and capital outflows in weak rising markets (EMS), undermining native currencies.
Specialists, nevertheless, stated that the stablecoin market is but to develop large enough to have an actual systemic affect.
The December report titled “Understanding Stablecoins” delves into stablecoin use circumstances, demand drivers, world rules, and macro monetary dangers, notably for rising markets.
“Stablecoins may very well be used to avoid capital stream administration measures (CFMs). The implementation of CFMs depends on established monetary intermediaries. By offering an avenue for capital flows outdoors of the widespread rails, stablecoins may very well be used to successfully undermine the implementation of CFMs (Cardozo and others 2024; He and others 2022; IMF 2023),” the report stated.
“Certainly, some proof factors to crypto, together with stablecoins, getting used as a market for capital flight,” the report added.
The worldwide financial authority argued that the penetration of stablecoins in rising markets with excessive inflation and unstable fiat currencies might set off “forex substitution,” by which locals ditch unstable fiat for USD-pegged tokens, eroding central financial institution management.
Greenback equivalents
These issues are usually not unfounded, as stablecoins, whose values are pegged to exterior references resembling fiat currencies, facilitate transactions outdoors conventional banking channels.
The most well-liked stablecoins, USDT and USD Coin (USDC), are pegged to the U.S. greenback and boast a mixed market cap of $264 billion, in keeping with CoinDesk information. That quantity is nearly equal to France’s FX reserves and bigger than these of the UAE, the UK, Israel, Thailand, and plenty of different nations.
These greenback equivalents, a few of which have been accepted as permitted fee stablecoins below the GENIUS Act within the U.S., may be freely traded on public blockchains, that means anybody, anyplace on the earth, can entry {dollars} with out having to open a checking account or comply with the often-tenacious tips for participating in foreign exchange transactions.
The outcome: If panic grips EMs, locals can now transfer capital throughout borders seamlessly and swiftly by way of stablecoins, weakening capital stream administration measures.
Think about stablecoins present throughout the 2013 taper tantrum, when Fed alerts triggered sharp EM depreciations and big outflows – their seamless peer-to-peer transfers might have simply worsened the disaster by accelerating outflows and forex declines.
What if EMs run into the same macro panic now?
Not large enough
All this sounds believable. Nevertheless, the stablecoin market, regardless of rising leaps and bounds over the previous few years, continues to be too small to have that form of an affect on EMs’ macroeconomics.
“It is manner too quickly for stablecoins to have a lot of an affect on EM forex runs, and their whole market dimension continues to be tiny relative to FX flows – being legalized by the GENIUS Act will not be related for fairly some time but (the legislation is handed however not but lively, possibly Jan 2027), and should by no means be for rising markets whose merchants should comply with native laws which might most likely frown on any use of stablecoins in any respect,” Noelle Acheson, the creator of the Crypto is Macro Now e-newsletter, instructed CoinDesk.
Acheson defined that whereas fiat-backed stablecoins have surged from $5 billion in 2020 to just about $300 billion at the moment, they continue to be mainly crypto buying and selling on-ramps used to fund crypto purchases, as evidenced by USDT pairs dominating spot quantity on main exchanges, together with Binance.
Moreover, the greenback is simply too massive and deeply entrenched within the world financial system. Although it would not have a conventional “market cap” like shares or crypto, its world financial base (bodily money + reserves) exceeds $2.5 trillion, with broader measures like M2 at over $20 trillion and worldwide liabilities of over $100 trillion, dwarfing stablecoins.
“Round 80% is used for crypto buying and selling, not treasury administration, and the stablecoin market continues to be small in relative phrases,” Acheson stated.
David Duong, Coinbase’s head of institutional analysis, voiced the same opinion, saying stablecoins’ restricted scale and coverage frictions stop systemic affect.
“Certain, stablecoins can speed up flight‑to‑USD in international locations the place they’re already fashionable, however their total scale stays small relative to cross‑border portfolio flows. The majority mechanics of bond/fairness redemptions, NDF [non-deliverable forwards] channels, and mutual fund outflows would nonetheless dominate macro strikes,” he stated.
Current state of flows
Rising IMF information reveals stablecoin cross-border flows—already eclipsing these of unbacked crypto property (like Bitcoin, which lack fiat backing)—since early 2022, with the hole widening regardless of stablecoins’ small total crypto market share.​
Asia-Pacific leads absolute volumes, adopted by North America, however when scaled to GDP, Africa, the Center East, Latin America, and the Caribbean (rising and growing economies, or EMDEs) stand out, pushed by web inflows from North America satisfying native demand for dollar-pegged stability and funds.
EMDEs dominate these corridors, claiming the biggest slice of $1.5 trillion in 2024 flows, a mere fraction of the quadrillion-dollar world funds market, but contrasting sharply with SWIFT’s advanced-economy focus.
