How Stablecoins Feed Global USD Demand

Scott Bessent must be happy. A new IMF study finds that stablecoins boost dollar demand. As a % of GDP, the largest users are Latin America & Caribbean (7.7%) and Africa & Middle East (6.7%)

The paper reveals $2 trillion in stablecoin flows in 2024, with North America as the primary source of net outflows ($54bn) - essentially exporting digital dollars to meet global demand. Flows increase when local currencies weaken against USD.

Particularly striking: China's stablecoin activity is 5.5x higher than previously estimated ($153bn vs $28bn), likely due to VPN usage. The March 2023 banking crisis significantly disrupted flows from North America, showing how intertwined stablecoins are with traditional banking.

Decrypting Crypto: How to Estimate International Stablecoin Flows