IMF Issues Guidelines for Managing Stablecoin Risks Beyond Existing Rules

Highlights:

• IMF warns stablecoin market above $300 billion needs stronger global regulation.
• IMF said fragmented rules in the US, UK, EU, and Japan increase risks and weaken oversight.
• Report urges international cooperation to harmonize standards and strengthen reserve requirements worldwide.

A new paper from the International Monetary Fund released on Thursday said global regulators are facing increased pressure as the stablecoin market has crossed $300 billion. The report reviewed rulemaking in the United States, the United Kingdom, Japan, and the European Union, showing that each region is building its oversight system in a different way. 

The IMF warned that stablecoins could cause “currency substitution” and weaken central bank control, especially in cross-border and non-custodial use. It said 97% are dollar-pegged and urged bans on using digital assets as legal tender. Stablecoin use is rising fast in Africa,…

— Wu Blockchain (@WuBlockchain) December 5, 2025

The IMF said in a social media post that stablecoins can help people use digital payments more easily, but may also create currency changes and stronger price swings. It added that it is working with the Financial Stability Board and the Bank for International Settlements to fix gaps in rules and improve supervision. The IMF said oversight can lower some risks. But strong national policies and trusted institutions should protect early. The report said, “International coordination remains key to solving these issues.” 

Stablecoins can expand financial access and drive innovation, but also cause currency substitution and market volatility. Global cooperation on regulation is essential. The IMF is working with @FinStdBoard, @BIS_org and others to close gaps and improve oversight.… pic.twitter.com/V2A4JXGYym

— IMF (@IMFNews) December 4, 2025

IMF Warns Regulatory Gaps Could Weaken Oversight

For the United States, the paper said rules are “yet to be fully implemented.” In the United Kingdom, regulations are still “in the proposal stage.” The IMF warned that these differences between the US, UK, EU, and Japan create regulatory fragmentation. They include who can issue stablecoins, how foreign issuers are treated, reserve and custody rules, and whether regulations change based on issuer size. Such differences can make global rules less effective. 

The paper recommended stronger international cooperation and harmonized standards. It also called for clear rules on legal treatment, supervision, reserve backing, custody, and cross-border use to manage stablecoin risks.

In July, the United States set a new tone when President Donald Trump signed the GENIUS Act. The law made strict reserve rules, banned yield-based stablecoins, and required issuers to work inside the U.S. financial system. A review from CertiK said these changes are now affecting global liquidity and changing money flows.

CertiK said 2025 brought clear rules for U.S. digital assets. Agencies now agree on how these assets are issued, traded, and held. The group said this helps issuers but increases the gap between U.S. rules and the European Union’s MiCA framework. The review said liquidity will be split into regional pools. This could slow down cross-border payments and create price differences between markets. It may also make it harder for companies working in more than one region.

The European Union copied some GENIUS Act rules, like full redemption at par and banning yield. It also required issuers to keep a large part of reserves in EU banks. Experts said this may increase risks linked to bank lending.

IMF Highlights Stablecoin Reserve Composition and Market Size Trends

The paper also looked at reserve data for top stablecoins. USDT and USDC mainly use short-term United States Treasuries, reverse repos backed by Treasuries, and bank deposits. About 40 percent of USDC reserves and nearly 75 percent of USDT reserves are in short-term Treasuries.

USDT also keeps around 5 percent of its reserves in Bitcoin. Stablecoins linked to currencies other than the US dollar are few, including some euro-based coins. Dollar-linked coins still make up most of the market. The IMF concluded that stablecoins can support the growth of digital finance, but uneven rules and rising differences between major regions bring new challenges. Future progress may depend on stronger cooperation among leading economies.