IMF models dollar stablecoin pressure on fixed and managed exchange rate regimes

A newly published International Monetary Fund working paper examines how dollar-denominated stablecoins interact with countries that fix or heavily manage their exchange rates. The paper focuses on a dynamic that is already well understood in macro circles: residents of countries with weak or devaluing currencies seek dollar exposure, and stablecoins have become a principal vehicle for that demand. Stripe’s decision to extend stablecoin accounts to small businesses across more than 100 countries, including jurisdictions outside its normal operating footprint, illustrates how access has broadened.

The IMF paper uses Bolivia as its primary case study. Under the country’s prior dollar shortage, the parallel market for US dollars in La Paz was deeply fragmented, with USDT quoted at anywhere between 12 and 15 bolivianos depending on the dealer, some counterparties holding no inventory at all, and banks applying opaque commissions on offshore transfers. There was no single visible reference price.

Bolivia’s June 2024 decision to lift its virtual asset restrictions changed the market structure materially. Stablecoin activity multiplied twelvefold within a year, and the USDT boliviano price became the country’s de facto reference exchange rate, appearing on shop price tags. The central bank now publishes USDT prices on its own website, a striking institutional acknowledgement of a privately issued instrument as a monetary benchmark.

For operators and policymakers, the Bolivian episode suggests that once a stablecoin achieves sufficient liquidity in a constrained foreign-exchange environment, it can displace official or informal rate-setting mechanisms faster than regulators anticipate. The IMF paper frames this as a modelling exercise, but the underlying dynamic, namely that managed-rate regimes face an accelerating erosion of foreign-exchange control wherever stablecoin access is permitted, carries clear implications for sovereign monetary policy and cross-border payment infrastructure alike.