A new paper from the Bank for International Settlements (BIS) examines how stablecoins could affect the international monetary system, with particular emphasis on emerging market and developing economies (EMDEs). With roughly 98% of stablecoin value denominated in US dollars, the authors argue stablecoins are most likely to reinforce existing currency hierarchies rather than challenge them, at least initially. But the consequences for EMDEs could be profound.
Current stablecoin transaction volumes remain modest in real economy terms. Once adjusted for bots, wash trading and intra exchange activity, transaction values drop to roughly 1% of unadjusted figures. Of those adjusted volumes, less than 1% are retail sized (under $250). The authors note this challenges industry claims that stablecoins are already used at scale for remittances or payments.
However, it is the trajectory that matters with the authors recognizing hockey stick growth. The number of active stablecoins nearly quadrupled following the November 2024 US elections, and market capitalization now exceeds $300 billion. Beyond issuance, we’d observe that funding is flowing into stablecoin infrastructure. Mastercard’s $1.8 billion acquisition of payments firm BVNK in March is just one example of the buildout underway across on ramps, wallets and payment rails.
The paper develops three scenarios spanning marginal to transformative outcomes. These are not mutually exclusive.
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