Cross-border stablecoin flows have reached new records in 2025, surpassing Bitcoin and Ethereum for the first time. This has prompted the International Monetary Fund (IMF) to issue a warning.
The fund states that the explosive growth of digital dollars could accelerate currency replacement, disrupt capital flows, and put pressure on the financial systems of emerging markets.
The IMF warns when stablecoin investments reach record high levels and surpass Bitcoin and Ether
The IMF's latest departmental paper on stablecoins shows that the market has grown rapidly, with total issuance exceeding $300 billion, representing about 7% of all crypto assets.
Tether (USDT) and USD Coin (USDC) dominate over 90% of this space. According to current blockchain data, the circulating supply of USDT is $185.5 billion, while the circulating supply of USDC is $77.6 billion.
The year 2025 stands out particularly for the rapid growth of these flows and their evolving nature. While Bitcoin and Ethereum previously dominated cross-border crypto transactions, stablecoins have now taken the lead.
The IMF noted that stablecoin flows are growing faster than original crypto asset reserves, and the gap is widening this year. The trading volume of USDT and USDC reached $23 trillion in 2024, marking a 90% annual growth.
The IMF's latest assessment highlights a structural change where stablecoins are no longer just a specialized tool but a significant driver of industrial cryptocurrency activity.
In the last two years, the combined circulating supply of the two largest stablecoins has grown over threefold to about $260 billion. They facilitated an estimated trading volume of $23 trillion in 2024.
"The cross-border nature of stablecoins could simplify remittances and payments but also complicate monetary policy and financial stability in emerging markets. A new IMF report explores the challenges and opportunities," the fund stated.
This highlights their utility and the challenges they pose for regulators. While the United States and Europe remain major trading centers, Asia now leads in stablecoin usage, and Africa, Latin America, and the Middle East show the fastest growth relative to GDP.
The IMF indicates a clear pattern where consumers and businesses in high-inflation or capital-controlled countries increasingly prefer digital dollars over local currencies.
EndGame Macron researchers argue that this is not a crypto hype but a structural change in global cash flows. Against this backdrop, they view stablecoins as the 'digital tip of the dollar system.'
Dollarized future, but with new risks.
Most major stablecoins are backed by short-term U.S. government securities, exposing issuers significantly to the U.S. financial system. At the same time, they offer yields that are significantly higher than traditional bank accounts in emerging markets.
Here lies the contradiction: stablecoins reinforce the influence of the U.S. dollar globally while undermining the monetary policy autonomy of countries struggling with inflation or capital flight.
IMF economist Eswar Prasad states that stablecoins may increase economic inclusion but may also "reinforce the dominance of the dollar" and concentrate economic power among large institutions and technology companies.
The report warns that rapid, unregulated adoption may amplify the instability of capital flows, especially in market stress situations where users quickly shift to or from dollar-backed assets.
One of the IMF's key concerns is regulatory fragmentation. Stablecoins often operate across borders faster than national policies can adapt. According to the fund, this creates opportunities for arbitrage and unregulated liquidity accumulation.
Major economies like the United States, EU, and Japan are developing clearer frameworks. Still, many emerging markets continue to lack guidance regarding the quality of reserves, redemption rights, or issuer oversight.
This imbalance leaves weaker economies vulnerable to sudden changes in demand for digital dollars, which could destabilize banking systems already under pressure.
This aligns with a recent Standard Chartered report that mentioned the potential of stablecoins to cause a $1 trillion drain from emerging market banks as savers shift deposits to digital dollar assets.
"As stablecoins grow, we believe they will bring several unexpected consequences, the first being the potential for deposits to shift from EM banks," the bank said in an email shared with BeInCrypto.
South Africa recently highlighted a risk, noting that stablecoins threaten the financial stability of banks in emerging markets.
The impact of stablecoins is now a global macroeconomic force.
The IMF's warning signifies broader recognition: stablecoins are no longer sidelined; they are central to global liquidity, on-chain trading, and digital payments.
Their growing dominance also explains why the market capitalizations of stablecoin markets often lead the cycles of the cryptocurrency markets, including Bitcoin and Ethereum, as well as their liquidity conditions.
The IMF is expected to publish a detailed policy roadmap in early 2026, focusing on reserve transparency, cross-border oversight, and minimum capital standards.
As stablecoin investments accelerate and adoption deepens in emerging markets, regulators still have less time to create global rules before digital dollars establish themselves as international value transfer instruments.
