Understanding Stablecoins

Departmental Papers, December 4, 2025

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Understanding Stablecoins

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Bibliographic details

• Authors: Tobias Adrian, Parma Bains, Marianne Bechara, Eugenio M Cerutti, Stephanie Forte, Federico Grinberg, Alessandro Gullo, Martina Hengge, Kathleen Kao, Tommaso Mancini-Griffoli, Soledad Martinez Peria, Marcello Miccoli, Marco Reuter, Nobuyasu Sugimoto
• Published: December 4, 2025
• Series: Departmental Papers
• DOI: https://doi.org/10.5089/9798229024075.087

Overview

• Stablecoins are a type of crypto asset that "have seen significant growth and attention recently."
• The paper "provides a comprehensive overview of stablecoins," covering market developments, use cases, potential benefits, associated risks, and the evolving international regulatory landscape.
• Stablecoin issuance "has doubled over the past two years," driven by their use in crypto trades.
• Future demand "could arise from other use cases supported by enabling legal and regulatory frameworks."
• Stablecoins are part of broader interest in asset tokenization.

Market developments and use cases

• Primary driver of recent issuance: use of stablecoins in crypto trades.
• Potential future drivers: broader payment and tokenization use cases if legal and regulatory frameworks enable them.
• Tokenization may facilitate new forms of digital assets and payments interoperability.

Potential benefits

• Through tokenization, stablecoins "could increase efficiency in payments through increased competition."
• Potential to support innovative financial solutions that can drive economic growth and create a more inclusive financial ecosystem.

Risks and vulnerabilities

• Key risk areas identified:
  • Macro-financial stability
  • Operational efficiency
  • Financial integrity
  • Legal certainty
• Exchange-rate and capital-flow concerns:
  • Stablecoins "may contribute to currency substitution" and "increase capital flow volatility."
  • These risks "could be more pronounced in countries experiencing high inflation, weaker institutions, or diminished confidence in the domestic monetary framework."

Regulatory landscape and international coordination

• The regulatory landscape for stablecoins is "evolving."
• The International Monetary Fund (IMF) and the Financial Stability Board (FSB) "have issued comprehensive policy recommendations."
• Many authorities "have started implementing international standards," but "a fragmented landscape persists."
• Cross-border nature of stablecoins "increases the potential for conflicts between domestic policies," making international cooperation "even more essential."

IMF role and policy implications

• The IMF "continues to closely monitor developments, offering analysis, guidance, and policy advice to member countries on crypto assets, including stablecoins."
• Policy emphasis:
  • Collaboration among policymakers, regulators, and industry stakeholders to realize benefits while addressing risks.
  • Building resilient legal and regulatory frameworks to enable safe adoption and integration of stablecoins into the global financial system.

Content in this bundle

• Understanding Stablecoins; IMF Departmental Paper No. 25/09; December 2025
  • Understanding Stablecoins; IMF Departmental Paper No. 25/09; December 2025 (Markdown version)
  • Understanding Stablecoins; IMF Departmental Paper No. 25/09; December 2025 (PDF)