Analysts Refute IMF Warning: Stablecoins Pose No Threat to Emerging Market Currencies
Analysts are pushing back hard against the International Monetary Fund's latest alarm bells. The IMF's warning that stablecoins could destabilize emerging market currencies? They call it misguided.
The Core Argument
The pushback centers on a fundamental disagreement about how modern finance works. Analysts argue that stablecoins—digital assets pegged to reserves like the US dollar—aren't weapons of monetary chaos. Instead, they're tools of financial inclusion, offering a lifeline in economies plagued by hyperinflation and capital controls.
Why the IMF Gets It Wrong
Critics say the IMF's framework is outdated. It views capital flows through a 20th-century lens, treating digital dollar access as a threat rather than a market-driven solution to local policy failures. The real risk, according to this camp, isn't stablecoin adoption—it's the stubborn refusal of some central banks to provide sound money, pushing citizens to seek alternatives.
A Tool, Not a Threat
For analysts, the narrative flips the script. Stablecoins don't attack sovereign currencies; they expose their weaknesses. They offer a predictable store of value and a cheap payment rail where traditional systems are slow, expensive, or broken. This isn't destabilization—it's demand for basic financial stability, served by code instead of central bank promises.
The bottom line? The warning from DC-based economists rings hollow on the streets where saving in the local currency has become a fast track to poverty. Sometimes, the most disruptive force in finance isn't a new technology—it's the stark, unforgiving logic of a better option.
Acheson says stablecoins are too small for a macro impact on EMs
The author of the crypto is Macro Now newsletter, Noelle Acheson, said that while the IMF’s claim could seem plausible, the stablecoin market is still too small to have this significant impact on the macroeconomics of emerging markets despite their rapid growth over the past few years. She also added that their total market size is tiny compared to FX flows.
Acheson also noted that stablecoins being legalized by the GENIUS Act will not be relevant until sometime in January 2027, although the law has already been passed. She pointed out that stablecoins may never gain significant relevance in EMs whose traders are required to adhere to local legislation. Authorities in some of these EMs may be entirely against the use of stablecoins.
Coinbase’s head of institutional research, David Duong, also shared the same sentiment, saying that stablecoins are too limited in scale and policies prevent systemic frictions. He noted that while stablecoins can accelerate flight-to-USD in nations where they are already popular, their overall scale is small compared to portfolio flows across borders.
The bulk of NDF (non-deliverable forwards) channels, mutual fund outflows, and bond/equity redemption mechanisms WOULD still dominate macro impacts, according to Duong.
Stablecoins eclipse unbacked crypto assets in cross-border flows
The IMF report revealed that stablecoin cross-border flows already eclipse those of unbacked crypto assets, such as Bitcoin, with the gap widening ever further. It also noted that the Asia-Pacific region leads in absolute stablecoin volumes, followed by North America. However, the economies of Africa, the Middle East, the Caribbean, and Latin America (EMDEs) stand out when scaled to GDP.
Meanwhile, Acheson noted that the dollar remains too entrenched in the global economy, despite the rapid growth of fiat-backed stablecoins, which have increased from $5 billion in 2020 to roughly $300 billion currently.
She further observed that although the dollar does not have a market cap like crypto or stocks, its global physical cash and reserves exceed $2.5 trillion. Broader measures, such as M2 and international liabilities, also dwarf stablecoins, at $20 trillion and $100 trillion, respectively.
Besides, around 80% of stablecoins in EMDEs are used for crypto trading and not for managing treasuries, according to Acheson. The IMF report also noted that EMDEs dominate these corridors with 2024 flows reaching approximately $1.5 trillion. However, this represents only a fraction of the quadrillion-dollar global payments market, which is dominated by the USD.
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