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IMF paper warns dollar stablecoins could intensify currency runs

The IMF model suggests stablecoins can provide dollar access when official channels are rationed, but their visible dollar-like price may spur synchronized exits during crises.

Reported · Written up by our desk · Regulation

Cointelegraph, citing a new International Monetary Fund working paper, says dollar stablecoins may improve access to foreign currency in countries with fixed or heavily managed exchange rates, while also increasing the risk of faster, more coordinated currency runs.

The paper, authored by economist Brandon Joel Tan, models how stablecoins affect parallel FX markets when official dollar access is limited. It argues stablecoins can help households obtain dollars when banks or official exchange mechanisms cannot meet demand.

At the same time, the IMF says the stablecoin price can become a high-frequency, widely watched signal of dollar scarcity. In a crisis, that visibility could encourage many people to abandon the local currency simultaneously, raising the chance of destabilizing dynamics.

Cointelegraph also points to real-world examples of stablecoin use where dollar access has been constrained, including reports that Bolivian airport retailers priced goods using USDT as a reference while still accepting US dollars or bolivianos, and past reporting on Argentines using underground exchange services to convert pesos into dollar-stablecoins near unofficial market rates. The paper suggests regulators may need temporary limits on unusually large, panic-driven transactions.

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