Research by IMF economist Marco Reuter finds that dollar‑stablecoin activity tends to remain elevated after capital controls are lifted. The analysis compares 217 instances of capital‑flow restrictions with periods when no measures were introduced, using the month before each activation as a baseline.
Impact of Tightening Controls
Following the introduction of tighter capital‑outflow restrictions, cross‑border stablecoin inflows increased by roughly 30% within six months and stayed above baseline levels through the twelfth month.
Effect of Removing Controls
When the restrictions were later removed, the data showed no detectable retreat in stablecoin activity, and the hypothesis that removals fully reverse the initial increase was rejected. The column does not specify how long the elevated activity persisted after removal.
Policy Implications
The findings suggest that simply easing capital controls may not be sufficient to bring stablecoin usage back to pre‑restriction levels. Authorities may need to continue monitoring digital‑dollar flows, holdings, and the responsiveness of domestic interest rates after policy changes.
Comparison with BIS Research
A related Bank for International Settlements (BIS) working paper also observes persistence in dollar deposits and stablecoin activity, though its estimates of stablecoin‑flow responses to restrictions are not statistically significant. The two studies differ in data coverage, methodology, and the specific policy comparisons they make, preventing a direct contradiction.
Broader Context
Both studies note that persistent dollar‑stablecoin usage does not automatically imply a loss of monetary control. While stablecoin holdings may rise, this does not necessarily equate to net capital outflows. Moreover, the impact on monetary transmission and inflation risk remains an open question.
