Key Takeaways

The IMF’s latest financial stability report highlights risks posed by stablecoins.

The report suggests stablecoin adoption has reached a tipping point where they may soon affect the wider economy.

Risks include spillover from a stablecoin run, undermining monetary policy tools, and credit disintermediation.

The International Monetary Fund (IMF) is the latest global body to flag the risks to financial stability posed by stablecoins.

In an Oct. 14 report, the United Nations agency highlighted three areas in which the global economy is vulnerable.

Each year, the IMF publishes a report that explores major threats to financial stability, highlighting global trends, regulation gaps, and improvement areas.

Stablecoins first received a mention in 2024, when the IMF observed that they were starting to be adopted by a broader range of financial institutions. Back then, the main concern was that a “major cyber incident” could cause one of the big stablecoins to depeg, plunging the crypto market into chaos that risked spilling over into the traditional financial system.

A year later, stablecoin risks have increased on the agency’s agenda.

In the 2025 edition of its financial stability report, the IMF mentions stablecoins 80 times and devotes significant attention to three threats posed by rising adoption.

In 2025, the two largest stablecoins, USDT and USDC, rival the giant money market funds run by major asset managers.

If issuers were forced to liquidate these giant stablecoin reserves to fund a surge in redemptions, they may now be large enough to move the overall Treasury market, the report warned. However, “systemic effects would be conditional on stablecoins’ continued growth,” the report added.

The caveat suggests the report’s authors still don’t believe a stablecoin run would be enough to have a knock-on effect on mortgage rates or corporate borrowing costs.

Rather, they think stablecoin adoption is at a tipping point where further growth will introduce the risk of such “systemic effects.”

The second stablecoin risk highlighted by the IMF reflects a concern shared by central banks around the world.

While policymakers in the EU and U.K. have pushed back against perceived threats to their monetary sovereignty, digital dollarization is a much more pressing concern in the Global South.

“Easy access to dollar-denominated stablecoins raises concerns about currency substitution, […] particularly in jurisdictions with weak macroeconomic fundamentals,” the IMF warned.

In such weak economies, rising stablecoin usage risks creating parallel economies, blunting the effect of interest rate adjustments, quantitative easing etc. To an extent, this has already happened in countries such as Argentina.

With the range of yield-bearing stablecoin instruments growing daily, low-interest savings accounts are becoming less compelling.

Lenders have warned that if these products ever led to a meaningful reduction in bank deposits, it would reduce the supply of credit in the economy.

Echoing Wall Street’s concerns, the IMF referred to this prospect as “credit disintermediation.”

In a more stablecoin-oriented economy, deposits will shrink, leaving banks with less money to lend consumers and businesses, the report warned.

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