International Monetary Fund publishes stablecoin paper as issuance doubles to about USD 300 billion

The International Monetary Fund published a Monetary and Capital Markets Department departmental paper, Understanding Stablecoins, setting out how fiat-backed stablecoins are evolving, how they are used, and how they intersect with tokenization and payments alongside an increasingly active but uneven regulatory response. The paper notes stablecoin issuance has doubled over the past two years to about USD 300 billion by September 2025, driven mainly by use in crypto trading, and largely summarizes existing IMF analysis and policy positions rather than introducing new policy lines. The paper describes potential efficiency gains in payments, particularly cross-border transactions and remittances, but emphasizes risks to macrofinancial stability, operational resilience, financial integrity, and legal certainty. It highlights vulnerabilities including de-pegging and run dynamics that could force fire sales of reserve assets, spillovers to short-term sovereign debt and repo markets, possible bank disintermediation, and heightened risks of currency substitution and capital-flow volatility in economies with high inflation or weaker institutions. It also flags AML/CFT challenges linked to pseudonymous and unhosted-wallet activity and persistent data gaps given issuers’ limited visibility on token holders’ residence. On policy and implementation, the IMF positions stablecoin oversight within IMF and Financial Stability Board recommendations and surveys emerging national regimes, while noting continuing fragmentation and the need for stronger cross-border cooperation. The paper also points to further international workstreams, including a Financial Action Task Force report planned for 2026 on money laundering, terrorism financing, and proliferation financing risks associated with stablecoins.