BIS warns stablecoins could weaken capital controls

BIS warns stablecoins could weaken capital controls in emerging markets, researchers say, after finding dollar-backed tokens respond far less to FX restrictions than traditional bank deposits. A study covering more than 130 economies links the gap to tokens circulating partly outside the regulatory perimeter, raising fresh questions about monetary sovereignty.

Key Takeaways

• Dollar-backed stablecoins showed little response to capital controls or FX limits, unlike foreign-currency bank deposits.
• BIS researchers studied inflows across more than 130 economies and tied the pattern to activity outside the regulatory perimeter.
• The study warns digital dollarization can undermine monetary sovereignty in emerging markets with weak currencies.
• Deposit dollarization showed little harm to monetary-policy transmission, but higher FX deposits carried somewhat greater inflation risk.
• BIS says policymakers may need new tools as traditional banking rules prove less effective for tokenized finance.

The findings matter for anyone following Fintech & Crypto Alerts, as dollar tokens grow into everyday payment and savings tools across emerging economies.

What did the BIS study find about stablecoins and capital controls?

According to reporting on the BIS research, both foreign-currency deposits and dollar-pegged stablecoin inflows tend to rise when macroeconomic stress hits. The difference is enforcement: stablecoin flows barely moved when authorities tightened capital controls.

Authors argued that outcome likely reflects how “stablecoins are partly circulating outside the regulatory perimeter,” leaving governments with less ability to curb token adoption than conventional dollar deposits.

Why does this matter for emerging-market monetary sovereignty?

Stablecoins could still undercut monetary sovereignty by letting households and businesses move into dollars outside the banking system. That risk is sharper in emerging markets with weak currencies or limited access to reliable financial services.

Despite those risks, researchers found little evidence that deposit dollarization weakens the transmission of monetary policy. Countries with higher foreign-currency deposits did face a somewhat greater risk of elevated inflation.

How are dollar stablecoins already used on the ground?

In Nigeria, the International Monetary Fund (IMF) has found households and small businesses using US dollar-pegged stablecoins for cross-border payments, remittances and access to dollar assets amid inflation, currency depreciation and scarce foreign exchange.

The IMF said the tokens can cut the cost and time of moving money across borders and widen financial access outside traditional banks. It also warned that widespread dollar-token adoption could reduce demand for local currencies and push more activity outside conventional banking channels.

Adoption is rising in Latin America too. Bitso Business reported an 81% year-over-year jump in stablecoin payment volume in the first half of 2026. Circle’s USDC and Tether’s USDT made up 40% of crypto purchases in the region in 2025, surpassing Bitcoin for the first time.

Global stablecoin market capitalization has climbed to about $309.7 billion, from roughly $260 billion a year earlier. BIS concluded regulations built for traditional banking and foreign-currency deposits may be less effective in a tokenized financial system, so officials may need fresh tools to protect financial stability.