How Stablecoins Can Improve Payments and Global Finance

IMF Blog, December 4, 2025

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Bibliographic details

• Authors: Tobias Adrian, Marcello Miccoli, Nobuyasu Sugimoto
• Published: December 4, 2025

Context and key facts

• Publication date and authors: December 4, 2025; Tobias Adrian, Marcello Miccoli, Nobuyasu Sugimoto.
• Relative size and recent growth:
  • Stablecoins have a market capitalization of about 10 percent of Bitcoin.
  • The market capitalization of the two largest stablecoins has tripled since 2023, reaching a combined $260 billion.
  • Trading volume has increased 90 percent, amounting to $23 trillion in 2024.
• Denomination and backing:
  • Most stablecoins are denominated in US dollars and are typically backed by US Treasury bonds.
• Geographic patterns:
  • Asia leads with the highest volume of stablecoin activity, exceeding North America.
  • Relative to gross domestic product, Africa, the Middle East and Latin America stand out.
  • Most of the flow is from North America to other regions.

Use cases and potential benefits

• Faster and cheaper cross-border payments:
  • Stablecoins could make international payments faster and cheaper for people and companies, particularly remittances.
  • Blockchains, as a single source of information, can simplify cross-border payment processes, reduce costs, and increase transparency.
  • Some remittances can cost up to 20 percent of the amount being sent.
• Trading and settlement:
  • Today, most stablecoin turnover relates to trading native crypto assets, as they are used for settlement in traditional currencies.
  • Cross border stablecoin flows are growing fast.
• Financial inclusion and competition:
  • Stablecoins could expand financial access by increasing competition with established payment service providers and by making retail digital payments more accessible to underserved customers.
  • They could facilitate digital payments where it is costly or not profitable for banks to serve customers and leverage synergies with other digital services.
• Coexistence with traditional improvements:
  • Enhancing cross-border payments also involves improving traditional infrastructure and building links between existing fast payments systems.
  • Improving the existing global financial infrastructure might be easier than replacing it.

Global risks and vulnerabilities

• Reserve and run risk:
  • Stablecoins’ value can fluctuate if the underlying assets lose value or if users lose confidence in the ability to cash out, which could lead to sharp declines, runs, fire sales of reserve assets, and disruptions in financial markets.
• Currency substitution and loss of monetary control:
  • Stablecoins can accelerate currency substitution, where people and companies forego a national currency for a foreign one, most commonly US dollars or euros.
  • Currency substitution decreases a country’s central bank ability to control monetary policy and serve as lender of last resort.
  • The need for physical cash and government limits on foreign currency currently limit substitution, but digital and transnational stablecoins change that dynamic.
• Capital flow and exchange rate dynamics:
  • Stablecoins could be used to circumvent capital flow management measures and reshape capital flow and exchange rate dynamics, with particular sensitivity for emerging markets.
• Financial integrity and illicit use:
  • Due to pseudonymity, low transaction costs, and cross-border ease, stablecoins could be exploited for money laundering and terrorist financing, undermining financial integrity if safeguards are inadequate.
• Fragmentation and interoperability:
  • Proliferation of non-interoperable stablecoins could undermine benefits by creating payment fragmentation across networks and jurisdictions.
• Data and statistical challenges:
  • The cross-border nature of stablecoins reduces visibility on the location and nationality of holders, affecting external sector, monetary, and financial statistics.
  • Transactions outside regulated entities hamper monitoring of cross-border flows and crisis response.

International perspective and regulatory landscape

• Policy and standard-setting activity:
  • The IMF and the Financial Stability Board (FSB) have issued recommendations to safeguard against currency substitution, maintain capital flow controls, address fiscal risks, ensure clear legal treatment and robust regulation, implement financial integrity standards, and strengthen global cooperation.
  • Established international standards are guiding regulation; a recent FSB report notes “regulatory efforts are increasingly converging toward treating stablecoins as payment instruments.”
• Divergent jurisdictional approaches and arbitrage risk:
  • Major jurisdictions are taking different stances in key areas, creating arbitraging opportunities where issuers could exploit gaps and locate stablecoins where oversight is weaker.
  • Some jurisdictions are considering access to central bank liquidity for certain stablecoin providers to complement regulation and mitigate run risks.
• Need for cooperation and data improvements:
  • Strong international cooperation is required to mitigate macrofinancial and spillover risks.
  • The IMF is working with international partners on closing data gaps in the context of Group of Twenty initiatives, and with the Financial Stability Board and other standard-setting bodies on a comprehensive and globally coordinated regulatory approach.

Outlook and policy implications

• Technology adoption and market structure:
  • Tokenization and stablecoins are here to stay, but future adoption and outlook remain uncertain; current development is compared to the early days of the internet.
  • It is conceivable that a few providers become global dominant players; commercial banks are active in issuing stablecoins and partnering with central banks.
• Policy priorities for turning stablecoins into a force for good:
  • Implement robust regulation and clear legal treatment.
  • Safeguard against currency substitution and maintain the effectiveness of capital flow measures.
  • Address fiscal risks and provide access to central bank liquidity where appropriate to mitigate run risks.
  • Implement financial integrity standards to prevent illicit use.
  • Improve data collection and cross-border visibility of holdings and flows.
  • Strengthen international cooperation and interoperability to avoid fragmentation and regulatory arbitrage.
• Balance between innovation and infrastructure improvement:
  • Achieving the best balance between leveraging stablecoin benefits and improving existing infrastructure will require close cooperation among policymakers, regulators, and the private sector.

Source: How Stablecoins Can Improve Payments and Global Finance — IMF, December 4, 2025

References

• new IMF report