Cross-border flows of stablecoins reached new highs in 2025, surpassing those of Bitcoin and Ethereum for the first time. This raised an alert from the International Monetary Fund (IMF).
The Fund states that the significant increase in digital dollars could accelerate the replacement of currencies, disrupt capital flows, and pressure financial systems in emerging markets.
The latest IMF report on stablecoins reveals that the market has grown rapidly, with total issuance surpassing $300 billion and representing about 7% of all crypto assets.
Tether (USDT) and USD Coin (USDC) control over 90% of this space. According to current available blockchain data, USDT has a circulating supply of $185.5 billion, while USDC has a circulating supply of $77.6 billion.
What distinguishes 2025 is the rapid growth and change in the nature of these flows. While Bitcoin and Ethereum once dominated cross-border crypto transactions, stablecoins have now taken the lead.
The IMF highlighted that stablecoin flows are expanding faster than native crypto assets, with the gap widening this year. Trading volumes for USDT and USDC reached $23 trillion in 2024, marking a 90% annual increase.
The latest IMF assessment highlights a structural shift, with stablecoins moving from being a niche settlement tool to becoming a dominant engine of global crypto activity.
In the last two years, the combined circulation of the two largest stablecoins has more than tripled to approximately $260 billion. They facilitated an estimated trading volume of $23 trillion in 2024.
“The cross-border nature of stablecoins can simplify remittances and payments but can also complicate monetary policy and financial stability in emerging markets. A new IMF report explores the challenges and opportunities,” the fund commented in a statement.
This highlights both their utility and the challenges they present to regulators. While the US and Europe continue to be major trading centers, Asia is now leading in the use of stablecoins, with Africa, Latin America, and the Middle East showing the fastest growth relative to their respective GDPs.
The IMF points to a clear pattern: consumers and businesses in high-inflation economies or capital control prefer digital dollars over local currencies.
Researchers from EndGame Macro argue that the trend is not due to crypto hype, but rather a structural shift in global monetary flows. In this context, they classify stablecoins as “the digital edge of the dollar system”.
The IMF’s Stablecoin Warning Is Really a Roadmap for the Future of Money
Once you read past the surface optimism, the IMF paper is making a straightforward point that stablecoins aren’t growing because people suddenly fell in love with crypto, they’re growing because the global… https://t.co/2qv75pY3GE
— EndGame Macro (@onechancefreedm) December 4, 2025
A dollarized future, but with new risks
Most major stablecoins are backed by short-term US Treasuries, giving issuers significant exposure to the American financial system. At the same time, they offer much higher yields than traditional bank accounts in emerging markets.
This creates a paradox: stablecoins strengthen the influence of the dollar globally while weakening the monetary autonomy of countries facing inflation or capital flight.
IMF economist Eswar Prasad states that stablecoins improve financial inclusion but can also “reinforce the dominance of the dollar” and concentrate economic power among large institutions and tech companies.
My article in IMF’s Finance & Development magazine “The Stablecoin Paradox” https://t.co/DJjm3Y0EWk Stablecoins are highlighting inefficiencies in existing financial systems, how technology can solve them. Paradoxically, might lead to more concentration of financial power.
— Eswar Prasad (@EswarSPrasad) December 4, 2025
The report warns that rapid and unregulated adoption could amplify the volatility of capital flows, especially during market stress events, when users rush to dollar-backed assets or flee from them.
A central concern of the IMF is regulatory fragmentation. Stablecoins often operate across borders faster than national policies can adapt. According to the fund, this creates opportunities for arbitrage and accumulation of unmonitored liquidity.
Large economies, including the US, EU, and Japan, are developing clearer frameworks. However, many emerging markets still lack guidelines on reserve quality, redemption rights, or oversight of issuers.
This discrepancy leaves weaker economies vulnerable to sudden changes in demand for digital dollars, potentially destabilizing already fragile banking systems.
This is in line with a recent report from Standard Chartered, which cited the potential of stablecoins to drain $1 trillion from emerging market banks as savers transfer deposits to dollar-denominated digital assets.
“As stablecoins grow, we think there will be several unexpected outcomes, the first being the potential for deposit outflows from banks in emerging markets,” the bank stated in an email shared with BeInCrypto.
South Africa recently confirmed the risk, highlighting that stablecoins pose a threat to the financial stability of banks in emerging markets.
The IMF's warning marks a broader recognition: stablecoins are no longer peripheral; they are central to global liquidity, on-chain trading, and digital payments.
Their growing dominance also explains why the market values of stablecoins often lead the cycles of the crypto market, including those of 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.
With stablecoin flows accelerating and adoption intensifying in emerging markets, regulators face a limited window of time to establish global rules before digital dollars become the standard means of international value transfer.
The IMF article warns that stablecoins surpass Bitcoin and Ethereum and elevate financial risks was first seen on BeInCrypto Brazil.
