Research: Dollar Stablecoin Use Persists After Capital Controls End

Stablecoin activity remains elevated after restrictions lift

Estimated cross-border stablecoin activity rises by roughly 30% within six months following tighter restrictions on capital outflows, according to research by Marco Reuter, an economist at the International Monetary Fund (IMF). The study, published in a VoxEU column on October 31, 2026, indicates that this elevated activity persists through the twelfth month after the tightening of capital controls. Crucially, Reuter reports no detectable retreat in stablecoin activity after the removal of these controls, challenging the assumption that lifting restrictions fully reverses the initial shift in digital asset usage.

Methodology and data scope

Reuter’s analysis compares 217 activations of capital-flow measures with countries that introduced no such measures in the surrounding months. The baseline for these estimates is the month before the activation. The study utilizes a panel of 188 countries covering the years 2018 to 2025, focusing specifically on the stablecoins Tether (USDT) and Circle (USDC). To measure activity, Reuter tracks cross-border stablecoin inflows and assigns locations probabilistically using wallet activity and exchange website audiences. Holdings are approximated through cumulative net flows, including transfers involving issuers.

The data reject the hypothesis that the removal of capital controls fully reverses the initial increase in stablecoin activity. This suggests that once users and institutions adopt dollar-denominated stablecoins as a mechanism to bypass or hedge against capital restrictions, the behavior does not immediately revert when those restrictions are lifted.

Impact during currency crises

The research also examines the role of stablecoins during currency crises. In a comparison involving 21 crisis countries during the 2021–2025 period, combined estimated holdings rose by approximately $7.9 billion above the trajectory of 86 matched emerging and developing control economies over the first year. This $7.9 billion increase represents roughly 75% of the crisis countries’ pre-crisis holdings, which totaled $10.4 billion.

These findings highlight the potential of stablecoins to serve as a rapid alternative store of value for residents in economies experiencing high inflation or strict financial regulations. The persistence of this activity, even after controls are relaxed, indicates a structural shift in how capital is allocated in these markets.

BIS study confirms persistence in dollar assets

A separate study published by the Bank for International Settlements (BIS) on July 21 supports these findings regarding the persistence of dollar assets. Authored by Boris Hofmann, Aaron Mehrotra, and Jan Paulick, the BIS working paper examines the relationship between dollar deposits and stablecoin activity. The study finds limited evidence that dollar deposits and stablecoin activity substitute for one another, suggesting that the two assets may serve different functions or that the shift toward stablecoins is additive rather than purely substitutive.

The BIS analysis uses Chainalysis gross USDT and USDC inflow data across 184 countries during the 2017–2024 period. Unlike Reuter’s study, which focuses on changes around specific policy activations, the BIS research includes comparisons across different restriction regimes and utilizes weighted restriction indices. The BIS authors note that estimated stablecoin-flow responses to restrictions are not statistically significant in their model, a discrepancy that may stem from differences in data coverage and methodology. Reuter’s panel extends one year further into 2025 and employs a different wallet-location model, whereas the BIS study relies on website traffic to allocate transfers involving entities such as exchanges.

Both studies contribute to a growing body of evidence that digital assets are becoming entrenched in global financial flows, particularly in emerging markets. The implications for monetary sovereignty and the transmission of monetary policy remain significant areas of ongoing research, with the BIS authors warning that experience with traditional bank deposits may not translate adequately to tokens circulating beyond regulated banking systems.