IMF Warns Dollar Stablecoins Could Speed Up Currency Runs

The International Monetary Fund published a working paper on how dollar stablecoins behave in countries with fixed or heavily managed exchange rates. The finding cuts both ways. The same technology that gives people access to dollars can, under certain conditions, speed up an exit from the local currency.

What did the IMF research find?

The paper's author, economist Brandon Joel Tan, titled the work "Stablecoins and Fragility in Fixed Exchange Rate Regimes." It models how stablecoins affect parallel foreign-exchange markets when official access to dollars is rationed or restricted by the state.

A parallel FX market is cash or peer-to-peer trading that operates outside official banking channels when those channels can't keep up with demand. That's exactly where stablecoins have taken hold as a convenient tool, according to Tan's observations.

IMF working papers aren't official policy recommendations for member states. But in practice they tend to become a reference point for national central banks and financial regulators drafting their own rules on crypto assets and currency exchange.

Tan writes that stablecoins make "dollar-like claims" easier to obtain. That same ease sits behind both effects the paper describes, the helpful one and the risky one.

How does a stablecoin turn into an exchange-rate benchmark?

In countries where the official exchange rate diverges noticeably from the market rate, the stablecoin price on the unofficial market often becomes a sharper indicator of real dollar demand than any bank quote. People watch that price and see exactly how far the local currency has drifted from fair value.

While dollar demand stays moderate, that benchmark is useful. Banks and exchange offices can't meet all the demand, so a stablecoin offers an alternative channel to currency. The trouble starts once the rate begins moving sharply. At that point every market participant sees the same alarming number at the same time, and that synchronization is what sets stablecoins apart from traditional exchange channels.

No such shared benchmark existed for ordinary people before. Black-market rates spread unevenly, known to some and not to others, passed along slowly through acquaintances or local exchange offices. A stablecoin's price on a P2P platform is visible to anyone with a smartphone, and it updates every minute.

Why is this mechanism risky during a crisis?

Traditional banking has no single shared panic indicator. Some people hear about trouble late, others trust their own bank longer than everyone else. A stablecoin removes that lag, since the price updates constantly and literally everyone sees it at once.

Economists call this kind of behavior coordinated panic. When every market participant has the same information in real time, mass decisions get made almost simultaneously rather than gradually, the way they used to spread through rumors and lines outside exchange offices.

• A synchronized signal. A stablecoin's price on exchanges and at exchange offices instantly shows real dollar demand to every market participant at once.
• The decision to exit the local currency gets made almost simultaneously across the market, not gradually the way it does in a classic bank run.
• The further the official rate drifts from the market rate, the louder this signal gets and the faster it spreads through the population.
• Tan proposes temporary limits on large or clearly panic-driven transactions as one possible tool to slow the outflow.

Bolivia and Argentina in practice

The paper leans on real-world observations as much as on the model itself. In Bolivia, airport retailers have been pricing goods in USDT since June 9, 2025, while still accepting dollars and bolivianos in cash. In Argentina, residents have used underground "crypto caves" for years to trade pesos for dollar stablecoins at rates closer to the real market than the official one.

Both examples point to the same thing. When a government artificially holds the exchange rate far from market levels, people find their own way to see the true dollar price. A stablecoin just makes that process faster and more visible.

The Financial Stability Board, or FSB, warned about similar risks back on March 24. Dollar stablecoins, in its assessment, can reinforce currency substitution, weaken central banks' monetary policy, and make it easier to sidestep capital-flow controls in emerging economies.

Economists have tracked similar patterns before in Turkey, Lebanon, and Nigeria, where residents shifted to dollar stablecoins whenever inflation spiked or the local currency devalued. Tan's paper is the first to offer a formal model of exactly why that happens.

What does this mean for markets with currency controls?

Ukraine also operates under a managed exchange rate and NBU restrictions on buying foreign currency, so the paper's logic won't feel like a textbook exercise to readers here. The hryvnia is officially quoted within a set band, while cash and non-cash rates for the dollar or USDT for hryvnia often diverge from the bank rate by a few percentage points.

For an everyday user, the paper's conclusion is practical. A stablecoin offers a fast, convenient channel to a dollar-denominated asset when official channels are limited or slow. But that same channel can turn into a channel for mass exit from the local currency during a sharp shock. Regulators in similar economies are unlikely to leave this topic alone for long.

The gap between the official rate and the P2P market rate isn't an anomaly. It's a built-in feature of any economy with currency controls. Stablecoins just made that gap visible to everyone, not only to people with access to insider information.

The IMF isn't proposing specific bans yet, only drawing central banks' attention to the mechanism itself. The next move most likely belongs to national regulators, including the ones already watching stablecoin rates in their own markets. Kurslog will keep tracking how research like this shapes regulatory decisions across countries, since those decisions set the rules for millions of P2P exchange users. Until formal rules arrive, the gap between the official and market rate remains the indicator worth watching, and it's users themselves who should watch it closest.