An analysis has found that dollar-linked stablecoins could bypass capital controls in emerging markets and weaken monetary sovereignty.

On July 21, blockchain outlet Cointelegraph reported that researchers at the Bank for International Settlements (BIS) described the spread of stablecoins as a new form of “digital dollarisation” and said it could pose new challenges to monetary sovereignty and financial stability.

The researchers compared flows of foreign-currency deposits and inflows of dollar-linked stablecoins across more than 130 countries. Demand for both assets tended to rise when macroeconomic instability increased, but unlike foreign-currency deposits, stablecoin flows were barely affected by capital controls and foreign-exchange regulations.

They attributed the difference to stablecoins being able to circulate outside the banking system and existing regulatory frameworks. In countries with unstable local currencies or limited access to financial services, households and companies can shift assets into dollar-denominated tokens instead of banks’ foreign-currency deposits.

If demand for dollars moves outside the traditional financial system, central banks’ foreign-exchange management and the effectiveness of capital controls could also weaken. As the share of holdings or payments made in dollar-linked tokens rises instead of local currency, demand for the domestic currency falls and the policy influence of monetary authorities can shrink. The study did not find clear evidence that expanding foreign-currency deposits directly weakens monetary policy transmission, but it found that countries with a higher share of foreign-currency deposits are more likely to be exposed to higher inflation risk.

The researchers said new financial stability tools are needed to respond to the spread of stablecoins. They said existing bank regulation and foreign-currency deposit management frameworks are insufficient to fully manage dollar-linked tokens that move across borders.

Such trends are already emerging in some developing countries. The International Monetary Fund (IMF) noted in a recent analysis of Nigeria that households and small businesses are using dollar-linked stablecoins for cross-border payments and remittances and to secure dollar-denominated assets. It said high inflation, currency depreciation and limited access to foreign exchange are boosting demand.

Use of stablecoins is also rising rapidly in Latin America. Crypto exchange Bitso said stablecoin payment volumes in the first half of 2026 rose 81 percent from a year earlier. Last year, Circle’s USDC and Tether’s USDT accounted for 40 percent of crypto purchases in the region, and it was the first time their combined share exceeded bitcoin.

The study showed that stablecoins can go beyond being a simple payment tool and change how capital controls and foreign-exchange regulations function. In emerging markets, the policy burden is increasing because they can become a channel that raises demand for dollars outside the banking system.