BIS Study Finds Stablecoins Slip Past Capital Controls
TL;DR
- The same restrictions significantly reduce foreign currency bank deposits.
- A history of banking crises predicts higher stablecoin demand in emerging markets.
- Dollarization tends to persist once established, and MiCA regulates issuers rather than permissionless transfers.
Capital controls can restrict access to dollar bank accounts, but they appear far less effective once those dollars move onto public blockchains.
A Bank for International Settlements working paper titled “Dollarisation and Monetary Control: What Lessons for the Rise of Stablecoins?”, published on July 21 by Boris Hofmann, Aaron Mehrotra and Jan Paulick, compares foreign currency deposits and dollar-backed stablecoin flows across more than 130 economies. It found that stablecoin inflows remain broadly similar whether countries impose foreign exchange restrictions or not. As with all BIS working papers, the findings represent the views of the authors rather than an official position of the institution.
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