IMF Warns Dollar Stablecoins Threaten Monetary Sovereignty

The IMF released a report titled "Understanding Stablecoins" on December 2, 2025, highlighting concerns about the impact of large foreign-currency stablecoins and stablecoins on weaker economies. Key points include:

Global stablecoin capitalization exceeds $300 billion, with 97% tied to the U.S. dollar.
Main issuers include Tether's USDT and Circle's USDC, with respective market caps of $185.3 billion and $78.0 billion.
IMF warns that stablecoins can bypass domestic banking systems, threatening monetary sovereignty, especially in high-inflation countries with weak institutions.
If domestic payments shift to dollar-denominated stablecoins, central banks could lose control over liquidity, credit creation, and interest rates.
IMF supports harmonized legal definitions and regulation for stablecoins, aligning with G20 and FSB principles.
High-risk structures like algorithmic or partially collateralized stablecoins can transmit volatility to financial systems.
The current fragmented regulatory landscape across regions creates potential for regulatory arbitrage.
IMF advises global coordination on licensing, reserve rules, and redemption rights to prevent financial instability similar to the 2008 crisis.

The report suggests that macroeconomic desks view stablecoins as a significant monetary policy issue, potentially leading to tighter regulations and controls.