The Bank for International Settlements published a working paper that builds a bilateral dataset of cross-border flows in Bitcoin, Ether, Tether and USD Coin across up to 184 countries from Q1 2017 to Q2 2024 and uses a gravity framework to assess what drives these transactions. It finds that cross-border crypto flows are large and less constrained by geographic frictions than traditional financial flows, with unbacked cryptoassets more closely associated with speculative motives and global funding conditions, while stablecoins and low-value Bitcoin transfers show stronger transactional patterns. Across the four cryptoassets, international flows peaked at around USD 2.6 trillion in 2021, with stablecoins accounting for about USD 1.2 trillion, before falling to USD 1.8 trillion in 2023 and then resurging by Q2 2024. Network mapping highlights the United States and the United Kingdom as key nodes, a shift in activity from China to other major emerging markets such as India, Indonesia and Türkiye, and a USDT network with a comparatively strong footprint of Türkiye and Russia. Empirically, higher global market volatility is associated with higher flows, while tighter credit conditions and USD appreciation are associated with lower flows in unbacked cryptoassets; stablecoin flows show stronger links to US monetary conditions. At the country level, high inflation is associated with higher cross-border flows, especially for stablecoins; higher traditional remittance costs are associated with larger stablecoin flows and larger low-value Bitcoin transfers. On policy, capital flow management measures are linked to reduced interbank claims between emerging market economies, but show little constraining effect on crypto flows, including an association with higher Bitcoin flows and a small increase in USD Coin flows in some specifications.
Bank for International Settlements 2025-05-01
Bank for International Settlements maps cross-border crypto flows and finds stablecoins and low-value Bitcoin linked to remittance costs while capital controls show little effect
The Bank for International Settlements released a working paper analyzing cross-border flows of Bitcoin, Ether, Tether, and USD Coin from Q1 2017 to Q2 2024, revealing these flows are less constrained by geographic frictions than traditional financial flows. The study highlights unbacked cryptoassets are linked to speculative motives, while stablecoins and low-value Bitcoin transfers are more transactional. Key findings include the United States and the United Kingdom as major nodes, a shift in activity from China to emerging markets, and the impact of global market volatility and monetary conditions on crypto flows.