Lifting capital controls may not undo dollar stablecoin habits, IMF research finds
Tightening capital controls lifts cross-border dollar stablecoin activity by roughly 30% within six months, and lifting those controls again does not bring it back down, according to estimates presented by IMF economist Marco Reuter.
Reuter compared 217 activations of capital-flow measures with countries that introduced none in the surrounding months, using the month before activation as the baseline, in a VoxEU column published on 31 October. After tighter restrictions on capital outflows, estimated cross-border stablecoin activity rose about 30% within six months and stayed elevated through the twelfth month. In a separate analysis of later removals, he reports no detectable retreat and says the data reject the hypothesis that removals fully reverse the initial increase. The column does not give a precise post-removal duration.
The timing is notable: the column appeared in October 2026, but the underlying USDT and USDC panel covers 188 countries during 2018–2025. Reuter measures activity through cross-border stablecoin inflows, which can show a larger market for dollar access without establishing that more wealth has left a country on a net basis. Country attribution is probabilistic, assigned from wallet activity and exchange website audiences, and holdings are approximated through cumulative net flows, including transfers involving issuers.
A separate currency-crisis comparison reports combined estimated holdings rising about $7.9 billion above the comparison-country trajectory over the first year, roughly 75% of the crisis countries' $10.4 billion in pre-crisis holdings. That sample covers 21 crisis countries during 2021–2025 and 86 matched emerging and developing control economies.
The findings sit alongside, rather than overturn, earlier work. A Bank for International Settlements study published on 21 July by Boris Hofmann, Aaron Mehrotra and Jan Paulick also finds persistence in dollar deposits and stablecoin activity, but its estimated stablecoin-flow responses to restrictions are not statistically significant. The two studies do not run the same test: the BIS paper uses Chainalysis gross USDT and USDC inflows across 184 countries during 2017–2024 and a deposit panel covering more than 130 economies during 1990–2019, while Reuter studies changes around the month a rule is activated. The BIS researchers also warn that experience with bank deposits may not translate to tokens circulating beyond regulated banks. For authorities easing controls, the practical implication is to keep measuring digital-dollar use after the rule changes.
What it means for Pakistan: Pakistan's own controls on moving money abroad make the finding directly relevant: if residents have built dollar stablecoin holdings to get around restrictions, easing those rules would not automatically pull that activity back into the banking system. That matters for the State Bank of Pakistan as it weighs how to treat crypto and for PVARA as it builds a licensing regime for virtual asset service providers, since the research suggests demand for dollar tokens persists after the rule that prompted it is gone. The source gives no Pakistani figures, and none should be assumed.
