BIS warns stablecoins bypass capital controls in emerging markets
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The Bank for International Settlements said dollar-backed stablecoins are largely unaffected by capital controls, based on a study of flows across 130 economies. The findings challenge traditional tools used by emerging markets to limit cross-border money movement.
The Study
The BIS analyzed stablecoin flows across more than 130 economies and found they appear "largely unaffected by either broad or specific capital flow restrictions." Researchers noted that foreign exchange restrictions and capital controls are "less effective" against stablecoins than against conventional foreign currency bank deposits. The report highlights a new channel for accessing U.S. dollar liquidity, particularly in emerging markets and developing economies.
Policy Implications
The BIS warned that policymakers in emerging markets may need to rethink their strategies as "dollarization is hard to reverse once established." The findings build on the institution's broader skepticism toward stablecoins, which it said in June 2026 still fall short of foundational monetary properties like singleness, elasticity, interoperability, and integrity. Meanwhile, total USD stablecoin supply reached $292.6 billion as of Tuesday, up from $253 billion a year ago.
What's Next
Regulators in the U.S., EU, Japan, and other regions are establishing dedicated frameworks to bring stablecoins into the regulated financial system. It remains unclear whether emerging markets will adopt stricter measures or adapt their capital control regimes to address the stablecoin channel.
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BIS warns stablecoins bypass capital controls in emerging markets
