BIS just dropped a study that confirms what we've been seeing on-chain:
Rising demand for dollar stablecoins is bleeding into traditional FX markets and wrecking local currencies.
They tracked 4 major USD stablecoins across 27 fiat pairs from 2021-2025. The data shows when stablecoin demand surges, local currencies get hammered and FX swap costs spike. Worse when banks are already stressed.
Translation: Citizens in high-inflation zones are fleeing to digital dollars ($USDT $USDC). This drains local deposits, kills monetary policy transmission, and central banks can't react fast enough.
Stablecoins aren't just crypto rails anymore. They're becoming a parallel dollar system that's destabilizing emerging market FX. Watch this space.
Rising demand for dollar stablecoins is bleeding into traditional FX markets and wrecking local currencies.
They tracked 4 major USD stablecoins across 27 fiat pairs from 2021-2025. The data shows when stablecoin demand surges, local currencies get hammered and FX swap costs spike. Worse when banks are already stressed.
Translation: Citizens in high-inflation zones are fleeing to digital dollars ($USDT $USDC). This drains local deposits, kills monetary policy transmission, and central banks can't react fast enough.
Stablecoins aren't just crypto rails anymore. They're becoming a parallel dollar system that's destabilizing emerging market FX. Watch this space.
