BIS Warns Stablecoins Undermine Capital Controls in Emerging Markets

The Bank for International Settlements (BIS) warned that U.S. dollar-pegged stablecoins may create a parallel channel for cross-border money movement, weakening emerging markets' foreign-exchange controls and capital restrictions. A research paper analyzed stablecoin flows across over 130 jurisdictions, finding stablecoin activity 'appears largely unaffected' by capital flow restrictions, with a portion of stablecoins circulating beyond regulatory reach.