IMF’s 2025 Warning: How Stablecoins Could Undermine National Currencies

Forget bank runs—watch for the 'stablecoin sprint.'

The International Monetary Fund just dropped its 2025 financial stability report, and buried in the usual macroeconomic jargon is a stark warning: privately issued stablecoins are morphing from a niche crypto tool into a direct threat to sovereign monetary control.

The Core Vulnerability: Monetary Sovereignty

The IMF isn't fretting over Bitcoin's volatility this time. The alarm bells are ringing for dollar-pegged digital tokens that promise stability and instant global settlement. Their analysis suggests these assets could trigger capital flight from weaker national currencies during times of stress, bypassing traditional capital controls with a few smartphone taps. Imagine a digital bank run that crosses borders in seconds, not days.

A Silent Shift in Power

This isn't about replacing the dollar—yet. It's about fragmentation. The report outlines a scenario where large tech or fintech firms leverage their global user bases to issue stablecoins at scale. These networks could create de facto digital currency zones, eroding the influence of central banks, especially in emerging economies. Monetary policy tools like interest rate adjustments lose their bite when a significant portion of the population transacts in a currency you don't issue.

The Regulatory Race Is On

Global watchdogs are scrambling. The IMF's message is clear: frameworks built for banks and payment processors aren't fit for purpose. The call is for coordinated, pre-emptive regulation that addresses reserve transparency, redemption guarantees, and systemic risk before a crisis forces a chaotic response. It's a classic case of regulators playing catch-up while innovation sprints ahead.

Finance's new irony? The tools designed to bring stability to crypto might be the very ones that destabilize the old financial order. The IMF's 2025 report is less a prediction and more a wake-up call: the future of money is a battleground, and stablecoins have just taken a central hill.

The International Monetary Fund (IMF) has issued a strong warning about the growing risks stablecoins may create for national currencies, especially in countries that already have weak financial systems. 

The IMF noted that 97% of stablecoins are tied to the US dollar and said governments should not allow digital assets to become legal tender.

Stablecoins Could Replace Weak Currencies

According to the recently released departmental paper, the IMF identifies stablecoins as a significant threat to central bank control, particularly in economies with weaker currencies. 

Since stablecoins are linked to strong currencies like the US dollar, people may slowly stop using their national money, which could hurt the country’s ability to control inflation or interest rates.

The concern is not new. In November, the European Central Bank also warned that dollar-based stablecoins could drain money from banks and reduce their financial stability.

Today, the stablecoin market is huge, worth about $316 billion in 2025. Most of it is controlled by USDT and USDC, which together hold over 90% of the market. Even euro- and yen-based stablecoins are growing, worth $675 million and $15 million, respectively.

Why Poorer Countries Are Most at Risk

Some countries with very high inflation are already turning to stablecoins to protect their money. For example,

• Argentina’s inflation went above 140% in 2023
• Turkey has inflation above 60%

Because of this, people are using stablecoins as a safer option, and transactions in these countries have increased by more than 300% in a year.

The IMF also explains that stablecoins are easy to access. Anyone with a smartphone can get them. Today, more than 420 million people around the world use crypto wallets, and stablecoins make up nearly 25% of all crypto transactions.

What the IMF Wants Countries to Do

The IMF says countries need stricter and clearer rules for stablecoins. Right now, only 45 countries have proper regulations, which leaves many gaps and increases risk.

To protect their own currencies, the IMF suggests two main steps. First, countries should strengthen their local currency by following strong economic policies. Second, they should set clear rules for stablecoins so these digital assets don’t end up being treated like official money.

The IMF also warns that digital assets should not become legal tender, because that WOULD weaken a country’s ability to control its financial system.