Dollar stablecoin use stayed high after capital controls ended, IMF economist estimates
In brief
- Stablecoin activity rose roughly 30% within six months of tighter outflow restrictions, Reuter estimates.
- No detectable retreat in activity followed the later removal of those restrictions, Reuter reports.
- A BIS working paper also found persistence, but no significant stablecoin response to restrictions.
- Wallet locations are inferred probabilistically, so country-level estimates carry real uncertainty.
What the column measured
Reuter compared 217 activations of capital-flow measures with countries that introduced no measure in the surrounding months. After tighter restrictions on outflows, his estimates show activity rising roughly 30% within six months and staying elevated through the twelfth month.
Then come the removals. Reuter says the data reject the hypothesis that removals fully reversed the initial increase (though the column doesn't give a precise post-removal duration).
That's the persistence finding.
The reported pattern suggests lifting controls alone may be insufficient to return stablecoin use to its earlier level.
How the numbers were built
The USDT and USDC panel covers 188 countries during 2018–2025, even though the column was published in October 2026. Reuter measured activity using cross-border stablecoin inflows, and that's a big caveat: inflows don't by themselves establish net wealth leaving a country. Locations are assigned probabilistically (using wallet activity and exchange website audiences), so pinning any flow to a single country is an estimate. Holdings were approximated through cumulative net flows, including transfers involving issuers.
In a currency-crisis comparison, combined estimated holdings rose about $7.9 billion above the comparison-country trajectory over the first year. That's roughly 75% of the crisis countries' $10.4 billion in pre-crisis holdings. The sample covers 21 crisis countries during 2021–2025 and 86 matched emerging and developing control economies.
The BIS paper reads differently
A BIS working paper by Boris Hofmann, Aaron Mehrotra and Jan Paulick also found persistence in dollar deposits and stablecoin activity, with limited evidence that the two substitute for one another. Its restrictions findings don't line up with Reuter's, though. Estimated stablecoin-flow responses to restrictions weren't statistically significant.
The datasets aren't the same. The BIS paper used Chainalysis gross USDT and USDC inflows across 184 countries during 2017–2024, while Reuter's panel ends a year later and uses a different wallet-location model. Its broad deposit panel covers more than 130 economies during 1990–2019.
Those differences mean neither study simply disproves the other. So what does it mean for central banks? On how much monetary control governments lose, the evidence is less conclusive.
Frequently asked questions
Did stablecoin use fall after capital controls were lifted?
Not according to Marco Reuter's Oct. 31 VoxEU column. His separate analysis of later removals found no detectable retreat in activity, and he said the data rejected the hypothesis that removals fully reversed the initial increase. The column doesn't give a precise post-removal duration.
Do the BIS and Reuter studies agree on stablecoins and capital controls?
Partly. A BIS working paper by Hofmann, Mehrotra and Paulick also found persistence in dollar deposits and stablecoin activity, but its estimated stablecoin-flow responses to restrictions weren't statistically significant. The two use different data periods and wallet-location models, so neither one simply disproves the other.
Does Reuter's research show capital flight through stablecoins?
Not on its own. Reuter measured activity using cross-border stablecoin inflows, which don't by themselves establish net wealth leaving a country. Country locations were also assigned probabilistically using wallet activity and exchange website audiences.
