New York Fed study links stablecoin inflows to currency crises
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A New York Federal Reserve study found that dollar stablecoin inflows to wallets linked to crisis-hit countries rose 1.8% during the week a currency or banking crisis began. The researchers analyzed nine episodes across eight countries from 2021 to 2025. The findings point to stablecoins as an alternative dollar channel outside regulated banking systems.
Key Facts
- Wallets linked to countries experiencing a financial crisis were 1.8% more likely to receive dollar stablecoins during the week the crisis began.
- The study examined nine crisis episodes across eight countries, including Argentina, Egypt, Iran, Myanmar, Nigeria, Russia, Turkey, and the United Kingdom, between 2021 and 2025.
- The stablecoin market has grown beyond $300 billion and is expected to reach trillions of dollars before the end of the decade.
- The probability of receiving stablecoins rose 1.9% during the crisis week, while sending activity increased 1.3% two weeks after the crisis began.
Crisis Demand Shift
Researchers Pablo Azar, Maryam Farboodi, and Nish Sinha studied nine episodes across eight countries between 2021 and 2025, including monetary disruptions, banking restrictions, sanctions, and devaluations. They linked Ethereum Name Service registrations carrying country signals with transfer histories for 19 major dollar-pegged stablecoins. During crisis weeks, tagged wallets recorded both a higher probability of receiving stablecoins and larger receipt volumes. A separate specification found no significant increase in the two weeks before the shocks, while the probability of receiving stablecoins rose 1.9% during the crisis week. Sending activity increased later, with wallets becoming 1.3% more likely to send stablecoins two weeks after the crisis began.
Regulatory Implications
Governments have traditionally relied on banks and other regulated intermediaries to enforce restrictions on foreign-exchange purchases and cross-border transfers. The advent of stablecoins has given households and businesses another route to dollar exposure that can operate outside those domestic banking channels. The research comes as the stablecoin market has grown beyond $300 billion and is expected to reach the trillions of dollars before the end of the decade. That expansion could make the alternative payment rails identified by the New York Fed increasingly relevant during future currency crises.
Study Limitations
The dataset does not represent every resident or crypto wallet in the countries studied. Its roughly 4.5 million observations are wallet-event-week records, and the sample focuses on wallet-country pairs that received stablecoins at some point within a 53-week window around each crisis. The result therefore captures a change in behavior among wallets already connected to stablecoin activity rather than showing that stablecoin adoption rose by 1.8% across an entire national population.
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New York Fed study links stablecoin inflows to currency crises
