Bank for International Settlements study finds dollar-backed stablecoins largely unaffected by capital controls in emerging markets

Jul 22, 2026

A July 2026 Bank for International Settlements working paper covering more than 130 economies found that dollar-backed stablecoin inflows appear largely unaffected by capital controls, creating a new channel for digital dollarization. The paper found that countries requiring approval for residents to hold foreign-currency bank accounts had deposit-dollarization ratios approximately 25 to 32 percentage points lower, while restrictions on cross-border stablecoin use showed no statistically significant relationship with stablecoin inflows. The Block reported that US dollar-linked stablecoin supply reached $292.6 billion on July 21, up from $253 billion one year earlier. BIS researchers said policymakers may need new tools because frameworks designed for traditional banking may be less effective in a tokenized financial system.

BIS stablecoin dollarization warning

▪The Bank for International Settlements study found that both traditional deposit dollarization and stablecoin inflows increase during periods of macroeconomic stress, such as banking crises and exchange-rate depreciation.
▪The Bank for International Settlements study found that dollar-backed stablecoins create a form of digital dollarization that is largely unaffected by capital controls or foreign exchange restrictions.
▪A Bank for International Settlements working paper published in July 2026 analyzed foreign-currency deposits and dollar-pegged stablecoin inflows across more than 130 economies.

Capital control bypass mechanisms

▪The Bank for International Settlements working paper found that countries requiring approval for residents to hold foreign-currency bank accounts had deposit-dollarization ratios approximately 25 to 32 percentage points lower than countries without such restrictions, while it found no statistically significant relationship between restrictions on cross-border stablecoin use and stablecoin inflows.
▪The Bank for International Settlements study attributes the resilience of stablecoins against capital controls to their circulation on public blockchains and in unhosted wallets outside the traditional regulatory perimeter.

Monetary sovereignty erosion risks

▪The Bank for International Settlements warned that widespread adoption of dollar-backed stablecoins could undermine monetary sovereignty in emerging markets by allowing households and businesses to shift into dollars outside the banking system.
▪The International Monetary Fund found that households and small businesses in Nigeria are using US dollar-pegged stablecoins for cross-border payments, remittances, and accessing dollar assets amid high inflation and currency depreciation.
▪The Bank for International Settlements warned that dollarization is highly persistent and difficult for policymakers to reverse once it becomes established in an economy.

Emerging market policy responses

▪The total supply of US dollar-linked stablecoins reached approximately $292.6 billion on July 21, 2026, up from approximately $253 billion one year earlier, according to The Block's data dashboard.
▪The Bank for International Settlements suggested that policymakers in emerging markets may need to develop new regulatory tools because traditional frameworks designed for conventional banking are less effective in a tokenized financial system.
▪Regulators in the United States, the European Union, and Japan are establishing dedicated frameworks, such as the MiCA framework in Europe, to bring stablecoins into the regulated financial system.