Currency strain could turn $300bn stablecoins into local money

Bolivia is evaluating whether to add Tether’s USDT to its regulated payment system alongside the boliviano and the U.S. dollar. The Finance Ministry reported that a prior prohibition on crypto has been lifted but no clear regulatory framework is in place, and a technical review of options is underway.

Virtual-asset operations in Bolivia increased more than 630% after electronic payment channels opened, reaching $430 million. Reported first-half volumes rose from $46.5 million in 2024 to $294 million in the first half of 2025.

Local authorities and analysts describe a common adoption sequence: currency weakness or a shortage of dollars prompts households to use dollar-pegged stablecoins, merchants begin accepting them, banks provide access, and governments formalize the arrangement once use becomes widespread.

The International Monetary Fund found that naira depreciation, high inflation and limited access to foreign exchange pushed Nigerians toward dollar-stablecoins as a store of value and a way to pay foreign suppliers. Between July 2023 and June 2024, Nigeria received about $59 billion in crypto-asset inflows, representing close to 60% of stablecoin inflows into sub-Saharan Africa since 2019. When regulators restricted banks’ links to crypto exchanges in 2021, much activity moved to peer-to-peer channels.

The Bank for International Settlements described the effect as “stealth dollarization,” saying stablecoins lower barriers to holding dollar-denominated value and can weaken a central bank’s influence on spending and saving. Regulators also note that private, interest-bearing stablecoins could compete with domestic-currency deposits, prompting depositors to move funds into token wallets that are outside the banking system and not available as collateral for bank lending.

Capital controls and foreign-exchange rules become harder to enforce when residents can transfer dollar value via smartphone wallets and blockchains. Those transfers are more difficult for authorities to monitor than conventional bank deposits and can reduce visibility into cross-border flows.

Adoption of a major stablecoin imports governance and concentration risks. Tether’s first-quarter 2026 attestation listed token-related liabilities near $183.4 billion, with about $141 billion held directly or indirectly in U.S. Treasury bills. Relying on a single private issuer exposes an economy to that issuer’s reserve policy, banking relationships, token-freezing powers and legal vulnerabilities abroad.

International institutions outline two broad pathways once stablecoins reach meaningful scale. In a formalization path, merchants and importers quote and settle invoices in stablecoins and banks and payment processors are licensed to handle them. In a suppression path, regulators restrict bank and exchange access, activity shifts to peer-to-peer and offshore channels, and authorities lose sight of continuing flows.

Analysts note the pattern becomes more widespread if many small and middle-income economies follow the same sequence, with each wallet download and merchant acceptance increasing practical adoption before regulators complete rule-making.