BIS exposes how stablecoins are slipping past capital controls

BIS researchers have found that dollar-backed stablecoin inflows across more than 130 economies remain largely unaffected by capital controls, exposing a growing challenge for emerging-market governments.

The BIS study compared stablecoin inflows with foreign-currency bank deposits to examine how households and businesses gain exposure to the U.S. dollar during periods of financial stress. Both forms of dollarization increased alongside sovereign crises, banking problems and strong exchange-rate pass-through, but only traditional deposits responded clearly to restrictions on foreign currency and capital flows.

Unlike bank deposits, dollar-pegged tokens can move through crypto exchanges, peer-to-peer markets and self-hosted wallets without passing through domestic banks. According to the researchers, this difference likely exists because “stablecoins are partly circulating outside the regulatory perimeter.”

The results indicate that restrictions designed for bank accounts may have limited influence over digital tokens. While governments can require approval for foreign-currency deposits or restrict transfers through financial institutions, users can still receive, hold, and send stablecoins through blockchain networks.

Researchers also found that deposit and stablecoin dollarization tend to persist once established. Their analysis showed little evidence that users simply replace foreign-currency deposits with stablecoins, suggesting the two channels can expand at the same time instead of competing for the same demand.

Capital controls are failing to contain stablecoin demand

Dollar-pegged tokens could weaken monetary sovereignty if households and companies increasingly store or transact in U.S. dollars outside regulated banks, the BIS study warned. The risk is more pronounced in emerging and developing economies where inflation, currency depreciation or restricted access to foreign exchange makes dollar assets attractive.

Capital controls have historically reduced some forms of deposit dollarization because banks must enforce domestic rules. Stablecoin inflows, however, were broadly similar in economies with and without such restrictions, according to the BIS.

Digital tokens have bearer-like features and can be transferred through unhosted wallets, making complete enforcement difficult. The BIS Annual Economic Report 2026 noted that blocking domestic intermediaries from handling unapproved stablecoins may limit some transactions, but such measures are likely to remain imperfect.

Despite the concern over monetary sovereignty, the study found little evidence that moderate deposit dollarization materially weakens monetary-policy transmission. Economies with higher foreign-currency deposits did, however, show a somewhat higher risk of elevated inflation.

Stablecoins may present different policy problems because their use can extend beyond savings into payments, trade settlement and remittances. As transactions leave the banking system, authorities may also lose access to information normally collected by regulated financial institutions, limiting their view of capital movements.

The BIS findings suggest policymakers may require controls designed for blockchain-based assets rather than relying only on rules created for bank deposits. Any response would need to account for foreign exchanges, peer-to-peer transfers and self-hosted wallets, all of which can keep activity outside domestic financial channels.

Emerging markets are driving stablecoin payment adoption

Nigeria illustrates how economic pressure can push stablecoins into daily financial activity. The International Monetary Fund found that stablecoins accounted for more than 65% of the country’s cross-border crypto inflows in 2024, with total inflows approaching the value of recorded remittances by 2025.

According to the IMF, Nigerian households use USDT and USDC for family remittances, crypto investments and access to dollar-denominated value. Small and medium-sized importers have also used the tokens to pay foreign suppliers, while some large companies have tested them for trade settlement.

Inflation, naira depreciation and limited access to foreign currency made stablecoins more attractive during 2023 and 2024, the IMF reported. When the Central Bank of Nigeria restricted banks from serving crypto users in 2021, activity moved toward less regulated peer-to-peer markets instead of disappearing.

Stablecoins can cut payment time and reduce dependence on correspondent banks, according to the IMF. However, the institution warned that heavy use of dollar tokens could lower demand for the naira and move more transactions beyond the reach of Nigerian regulators.

A similar pattern has emerged in Latin America. Bitso Business reported an 81% year-over-year increase in stablecoin payment volume during the first half of 2026. The company also found that Tether’s USDT and Circle’s USDC represented 40% of regional crypto purchases in 2025, overtaking Bitcoin for the first time.

Across the crypto market, stablecoin capitalization has risen to about $309.7 billion from roughly $260 billion a year earlier. The increase gives dollar-backed tokens a larger role in payments and savings while adding urgency to the regulatory concerns identified by the BIS.

BIS research has also separated privately issued stablecoins from tokenized bank money. Through Project Agorá, eight central banks and more than 40 regulated institutions have tested cross-border settlement using tokenized commercial-bank deposits and central-bank reserves, according to the institution’s 2026 report.

That model keeps tokenized payments inside a regulated two-tier banking system, while stablecoins can circulate beyond it. For policymakers, the contrast explains why existing capital controls may struggle to contain digital dollarization even as demand for faster cross-border payments continues to grow.