Key notes
- The fund claims that stablecoins can “rapidly penetrate an economy via the internet and smartphones.”
- If much activity moves to foreign stablecoins, central banks lose control of domestic liquidity and interest rates.
- The IMF points out that about 97% of the roughly $300 billion stablecoin market is tied to the US dollar.
On December 2, 2025, the IMF released a new 56-page departmental paper, “Understanding Stablecoins,” warning that large foreign currency stablecoins can accelerate currency substitution and erode monetary control in weaker economies. The report is available on the IMF website and is written by Tobias Adrian and 15 co-authors from the Fund’s Monetary and Capital Markets Department.
Stablecoin Stock in US Dollars
The document notes that the global capitalization of stablecoins now exceeds $300 billion. Around 97% of tokens in circulation reference the US dollar, concentrating influence on issuers such as Tether’s USDT and Circle’s USDC.
USDT is trading at $1.00026 with a market cap of around $185.3 billion as of December 4, 2025. USDC is trading at $0.9999 with a market cap near $78.0 billion and a 24-hour volume over $11.0 billion.
The Stablecoin market is in press time | Source: DeFi Lama
How Stablecoins can interfere with monetary policies
The IMF warns that foreign stablecoins can bypass domestic banks and payment channels. The authors write that stablecoins can quickly penetrate an economy through the Internet and smartphones. The use of foreign currency tokens could lead to currency substitution and potentially undermine monetary sovereignty, particularly in the presence of unhosted wallets. The paper highlights that this risk is more acute in countries characterized by high inflation, weak institutions or low confidence in the local currency.
The report argues that if a large share of payments and domestic savings migrate to dollar-denominated stablecoins, central banks lose their grip on liquidity conditions, credit creation and the transmission of interest rates. The authors add that late-launched CBDCs may struggle to replace private stablecoins once they achieve network effects in retail payments, cross-border remittances, and merchant settlement.
In terms of regulation, the IMF aligns itself with the G20 and the FSB by approving the principle “same activity, same risk, same regulation”. The document calls for harmonized legal definitions of stablecoins, strict reserve and redemption standards, granular disclosure of reserve composition and custody, and cross-border supervisory colleges to prevent issuers from exploiting jurisdictional loopholes.
The IMF distinguishes between high-risk structures such as algorithmic or partially collateralized stablecoins, warning that operations in these tokens can transmit volatility in both crypto markets and local banking systems. The authors compare these designs with fully fiat-backed coins that hold short-term government securities and cash at regulated institutions. However, they continue to point to concentrated exposure to a single foreign currency as a macro-financial vulnerability for small states.
The paper highlights the fragmentation of rules in the US, EU, UK and Asia, noting that regimes such as the EU’s MiCA, Japan’s stable currency framework and various US state-level regimes create room for regulatory arbitrage. It urges authorities to coordinate licensing, reserve rules, AML/CFT requirements and repurchase rights to avoid a repeat of the development of the “shadow banking system” that preceded the 2008 crisis.
“Without consistent global regulation, stablecoins could circumvent national safeguards, destabilize vulnerable economies, and transmit financial shocks across borders at high speed,” the IMF authors write.
The publication follows several country-level consultations in which IMF staff opposed the unregulated use of the stablecoin in Latin America, sub-Saharan Africa and parts of Eastern Europe, and effectively codifies this line into a global model.
The institutional point of view
Macro desks should read this document as a road map for how regulators will treat large stablecoin issuers in the next cycle. The IMF has just presented dollar stablecoins as a matter of monetary sovereignty and not a niche payments product. It places USDT, USDC, and similar tokens in the same political conversation as capital controls, foreign exchange intervention, and CBDCs. This usually ends with bank-like regulation, stricter cross-border controls and higher compliance fees.
For traders, this shifts the long-term risk from “will reserves hold up” to “will policymakers tolerate offshore dollar rails over their economies.” This risk particularly affects non-US sites and DeFi protocols that rely on unrestricted offshore stablecoin flows for liquidity.
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Disclaimer: Coinspeaker is committed to providing unbiased and transparent reporting. This article is intended to provide accurate and current information, but should not be considered financial or investment advice. Because market conditions can change quickly, we encourage you to verify the information for yourself and consult a professional before making any decisions based on this content.
Yana Khlebnikova joined CoinSpeaker as an editor in January 2025, following previous stints at Techopedia, crypto.news, Cointelegraph and CoinMarketCap, where she honed her expertise in cryptocurrency journalism.
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