Cross-border stablecoin flows are set to hit a record in 2025, surpassing Bitcoin and Ethereum for the first time. In response, the International Monetary Fund (IMF) has issued a warning.
The IMF states that the explosive increase of the digital dollar could accelerate currency substitution, disrupt capital flows, and burden the financial systems of emerging markets.
IMF issues largest warning on stablecoin outflows... surpassing Bitcoin and Ethereum
According to the latest departmental report by the IMF on stablecoins, the stablecoin market has rapidly grown to exceed a total issuance of 300 billion dollars, accounting for about 7% of the total cryptocurrency assets.
Tether (USDT) and USD Coin (USDC) account for over 90% of this market. Currently, according to blockchain data, the circulating supply of USDT is $185.5 billion, and the circulating supply of USDC is $77.6 billion.
The uniqueness of 2025 lies in the rapid increase and volatility of these flows. Bitcoin and Ethereum once dominated cross-border cryptocurrency transactions, but stablecoins have now taken the lead.
The IMF has reported that the flow of stablecoins is expanding faster than the original crypto assets this year. In 2024, USDT and USDC transaction volumes reached $23 trillion, marking a 90% annual increase.
The IMF's latest assessment highlights a structural change where stablecoins are no longer niche payment tools but a major driver of global cryptocurrency activity.
Over the past two years, the total circulation of two major stablecoins has increased more than threefold, reaching approximately $260 billion. In 2024, they facilitated around $23 trillion in transaction volume.
"The cross-border nature of stablecoins can simplify remittances and payments, but it can complicate monetary policy and financial stability in emerging markets. A new IMF report explores these challenges and opportunities," said the IMF.
This highlights their utility and simultaneously presents challenges to regulators. While the US and Europe remain major trading hubs, Asia currently leads in stablecoin usage, with Africa, Latin America, and the Middle East showing the fastest growth relative to their GDP.
The IMF points out a distinct pattern where consumers and businesses in high-inflation economies or economies with capital controls increasingly prefer digital dollars over local currencies.
Researchers at Endgame Macro argue that this trend reflects a structural change in global capital flows rather than heightened interest in cryptocurrencies. In this context, they describe stablecoins as the "digital edge of the dollar system."
A dollarized future, new risks
Most major stablecoins are backed by short-term US Treasury securities, providing issuers with significant exposure to the US financial system. At the same time, they offer yields much higher than traditional bank accounts in emerging markets.
This creates a paradox: stablecoins enhance the influence of the US dollar globally while undermining the monetary autonomy of countries struggling with inflation or capital flight.
IMF economist Eswar Prasad states that while stablecoins enhance financial inclusion, they can "strengthen dollar dominance" and concentrate economic power among large institutions and tech firms.
The report warns that rapid and unregulated adoption can amplify the volatility of capital flows, especially during market stress events when users flock to or leave dollar-backed assets.
The IMF's main concern is the fragmentation of regulation. Stablecoins often operate faster than national policies can adapt across borders. This creates opportunities for arbitrage and the potential accumulation of unmonitored liquidity.
Major economies, including the US, EU, and Japan, are developing clearer frameworks. However, many emerging markets still lack guidance on reserve quality, redemption rights, and issuer oversight.
This mismatch leaves weak economies vulnerable to sudden shifts in demand for digital dollars and could destabilize an already burdened banking system.
This aligns with a recent Standard Chartered report, which noted that stablecoins could absorb $1 trillion from emerging market banks, as depositors shift to digital dollar assets.
"As stablecoins grow, we expect several unforeseen consequences. The first is the possibility of deposits flowing out of emerging market banks," the bank stated in an email shared with BeInCrypto.
Recently, South Africa confirmed that stablecoins threaten the financial stability of emerging market banks.
Stablecoins, global macro forces
The IMF's warnings acknowledge that stablecoins are no longer peripheral but are at the center of global liquidity, on-chain transactions, and digital payments.
The increasing dominance of stablecoins is why their market capitalization often leads cycles in the cryptocurrency market compared to Bitcoin, Ethereum, and their liquidity conditions.
The IMF is set to unveil a detailed policy roadmap focused on reserve transparency, cross-border oversight, and minimum capital requirements in early 2026.
As the flow of stablecoins accelerates and adoption deepens across emerging markets, regulators face a narrowing window to establish global rules before digital dollars become the primary means of international value transfer.
