The Bank for International Settlements has published a working paper comparing conventional deposit dollarisation with the rise of US dollar-pegged stablecoin use in emerging market and developing economies. Using foreign-currency deposit data and recent stablecoin inflow data for more than 130 economies, the paper finds that both forms of dollarisation are associated with similar macro-financial drivers, notably stronger exchange rate pass-through and episodes of sovereign or banking stress. It also finds both forms are persistent once established, with little evidence that stablecoins are simply replacing existing dollar deposits. The paper highlights one important difference for policymakers. Stablecoin flows appear largely unaffected by foreign exchange and capital flow restrictions, unlike deposit dollarisation, which the authors link to stablecoins operating partly outside the regulatory perimeter. In the historical evidence, sovereign debt crises were associated with higher deposit dollarisation, while banking crises were more relevant for stablecoin inflows. The paper also finds that moderate deposit dollarisation has been associated with somewhat higher inflation risks, but there is little evidence of material effects on overall monetary policy transmission.
Bank for International Settlements2026-07-21
Bank for International Settlements publishes working paper finding stablecoin dollarisation is persistent and largely unaffected by capital flow restrictions
The Bank for International Settlements published a working paper finding that stablecoin dollarisation and deposit dollarisation in emerging market and developing economies are driven by similar macro-financial pressures and are both hard to reverse once established. Unlike foreign-currency deposits, stablecoin flows appear largely unaffected by foreign exchange and capital flow restrictions. The paper finds only limited evidence that deposit dollarisation materially weakens monetary policy transmission.