Dollar stablecoins can improve access to foreign currencies in economies with fixed or tightly managed exchange rates, but they can also exacerbate currency fluctuations when pressures on the domestic currency become intense, according to a modern paper published by the International Monetary Fund (IMF).
The findings come from a working paper by economist Brandon Joel Tan. Article titled “Stablecoins and the fragility of fixed exchange rate systems.” modeled how stablecoins affect parallel currency (FX) markets as official access to the dollar is rationed.
The findings highlight that stablecoins can support people access dollars when banks or official exchange channels are unable to meet demand. However, during a currency crisis, the same widely observed stablecoin price may prompt many people to abandon the local currency at once, suggesting that regulators may need momentary limits for unusually vast or panic-driven transactions.
Tan argued that stablecoins facilitate access to “dollar-like claims” while creating a high-frequency noticeable price for dollar demand. When a country’s official exchange rate is far from the market rate, that price can signal a growing dollar shortage and at the same time prompt more people to leave the local currency.
Stablecoins are emerging as parallel currency benchmarks
The article’s argument reflects how stablecoins are already used in countries where official access to dollars is confined. On June 9, 2025, retailers in Bolivian airports priced goods using USDT as a benchmark while accepting US dollars or Bolivianos.
In 2024, Cointelegraph reported that Argentines were using underground “crypto caves” to exchange pesos for dollar stablecoins at rates closer to the unofficial market. This practice gave residents another way to save money as the peso depreciated and currency controls confined access to the dollar.
dollar stablecoins
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While these uses have highlighted the benefits of stablecoins, regulators have also recently warned about broader risks. On March 24, the Financial Stability Board (FSB) said dollar stablecoins could expose emerging economies to currency substitution, weaker monetary policy and circumvention of capital flow measures.
The FSB called on policymakers to assess the development of the stablecoin sector to understand and respond to liquidity and operational risks related to the links of stablecoins to the wider financial system.
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