Dollar stablecoin use stayed elevated after capital controls ended, new research suggests

Dollar stablecoin activity can remain elevated after capital controls end, according to historical estimates presented by IMF economist Marco Reuter.

His Oct. 31 VoxEU column adds a persistence finding to the debate over stablecoin dollarization. Earlier Bank for International Settlements research points in a similar direction on the durability of dollar access. The evidence is less conclusive about how much monetary control governments lose: persistent transfers, lasting dollar holdings and a weaker response to interest rates are different outcomes.

Dollar use after restrictions end

Reuter compares 217 activations of capital-flow measures with countries that introduced no measure in the surrounding months. The estimates use the month before activation as their baseline. Following tighter restrictions on capital outflows, estimated cross-border stablecoin activity rises roughly 30% within six months and remains elevated through the twelfth month.

In a separate analysis of subsequent removals, he reports no detectable retreat. He also says the data reject the hypothesis that removals fully reverse the initial increase. The column does not give a precise post-removal duration.

The different responses to tightening and removal have a practical policy consequence. If activity simply tracked the presence of a restriction, easing it should bring activity back down. The reported pattern instead suggests that lifting controls alone may be insufficient to return stablecoin use to its earlier level.

The timing matters. The column was published in October 2026, but the underlying USDT and USDC panel covers 188 countries during 2018--2025.

Reuter measures activity using cross-border stablecoin inflows. That can reveal a larger market for dollar access without establishing that more wealth has left the country on a net basis. Gross receipts and net capital outflows answer different questions.

Country attribution also introduces uncertainty. Reuter assigns locations probabilistically using wallet activity and exchange website audiences.

Holdings are another distinct measure. Reuter approximates them through cumulative net flows, including transfers involving issuers; those estimates depend on inferred wallet locations and transaction coverage.

His separate currency-crisis comparison reports combined estimated holdings rising about $7.9 billion above the comparison-country trajectory over the first year. That equals roughly 75% of the crisis countries' $10.4 billion pre-crisis holdings. The sample comprises 21 crisis countries during 2021--2025 and 86 matched emerging and developing control economies.

What persistence means for monetary control

The BIS study published July 21, by Boris Hofmann, Aaron Mehrotra and Jan Paulick, also finds persistence in dollar deposits and stablecoin activity. It reports limited evidence that the two forms of dollar exposure substitute for one another.

Its restrictions findings look different from Reuter's: estimated stablecoin-flow responses are not statistically significant. But the studies do not run the same test.

The BIS working paper uses Chainalysis gross USDT and USDC inflows across 184 countries during 2017--2024. It allocates transfers involving entities such as exchanges using website traffic. Reuter's panel ends a year later and uses a different wallet-location model. The BIS study's broad deposit panel, meanwhile, covers more than 130 economies during 1990--2019, a much longer historical record than either stablecoin dataset.

Their policy comparisons differ too. Reuter studies changes around activations. BIS includes comparisons across restriction regimes and quarterly Latin American panels using weighted restriction indices and stablecoin-specific rules. An association with the rules in place is different from a response around the month a rule changes.

Those differences prevent a simple verdict that one study disproves the other. Nor does a statistically insignificant estimate establish that restrictions can never affect stablecoin use.

Dollarization can mean people holding foreign currency instead of domestic money. Demonstrating that preference is different from measuring whether a central bank's interest-rate decisions become less effective.

The BIS researchers address monetary transmission using deposit dollarization and policy surprises in 14 emerging-market economies during 2000--2024. They find limited evidence of significant differences in transmission by deposit-dollarization level. That test does not estimate the direct causal effect of stablecoin adoption.

They also find moderate deposit dollarization associated with somewhat higher inflation risks.

The authors warn that experience with deposits may not translate adequately to tokens circulating beyond regulated banks and serving different purposes.

CryptoSlate's earlier coverage of crisis-linked stablecoin demand examined the enforcement challenge created by dollar access outside domestic banking channels. The post-removal evidence extends that discussion by asking whether the alternative remains in use after the original restriction ends.

For authorities easing controls, the practical implication is to keep measuring digital-dollar use after the rule changes. A decline in transfers, a decline in dollar holdings and a stronger response to domestic interest rates would each tell a different story.

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