IMF Study Warns Dollar Stablecoins Could Fuel Currency Runs in Fragile Economies

Dollar stablecoins can make it easier for people in countries with fixed or tightly managed exchange rates to get access to foreign currency, but that same access could speed up currency runs when pressure on the local currency intensifies, according to a new working paper from the International Monetary Fund.

The research, authored by economist Brandon Joel Tan and titled “Stablecoins and Fragility in Fixed Exchange Rate Regimes,” modeled how stablecoins behave in parallel foreign exchange markets when official dollar access is limited or rationed by banks and governments.

A Visible Price Signal Can Trigger Mass Exit

Tan’s paper argues that stablecoins make dollar like assets easier to obtain while also creating a constantly visible, high-frequency price that reflects real dollar demand. When a country’s official exchange rate diverges sharply from the market rate, that stablecoin price can act as a signal of growing dollar scarcity, potentially prompting large numbers of people to abandon the local currency at the same time. The paper suggests regulators may need temporary limits on unusually large or panic-driven transactions to manage this risk.

Real-World Examples Already Emerging

This pattern is already playing out in practice. Bolivian airport retailers were spotted pricing goods using USDT as a reference point in mid 2025, while Argentines have used informal exchange networks known as crypto caves to trade pesos for dollarstablecoins at rates closer to the unofficial market, helping preserve savings amid inflation and currency controls.

The Financial Stability Board raised similar concerns in March, warning that dollar stablecoins could expose emerging economies to currency substitution, weakened monetary policy, and circumvention of capital controls, urging lawmakers to monitor the sector’s growth closely.