The International Monetary Fund (IMF) released a special report titled "Understanding Stablecoins" on December 5, highlighting that the lack of unified global regulation for stablecoins is leading to market inefficiencies and threatening financial stability.
The report warns that if stablecoin issuers migrate to regions with lax oversight or build isolated ecosystems with poor interoperability, risks to the global financial system will intensify. As of September 2025, the total global stablecoin market capitalization has surged to approximately $300 billion—nearly doubling in a year—and stablecoins have become a key tool for cross-border payments.
01 IMF’s Warning: Systemic Risks Behind the Boom
The IMF’s latest report reveals a paradox: while stablecoins are rapidly expanding in areas like cross-border payments, global regulatory frameworks are dangerously diverging.
The IMF points out that differences in regulatory approaches across countries are causing fragmentation. For example, the European Union (EU) has implemented comprehensive crypto asset market regulations (MiCA) with strict issuance requirements.
Meanwhile, the United States aims to strengthen the dominance of dollar-backed stablecoins through the GENIUS Act. Japan operates under its own independent regulatory framework.
The IMF expresses deep concern, arguing that such regulatory misalignment may not only lead to market inefficiencies but could ultimately undermine financial stability. The core message of the report is that introducing regulations alone cannot address all risks.
Countries must work together internationally to establish robust macroeconomic policies and solid institutional frameworks to safeguard monetary sovereignty and prevent regulatory fragmentation.
02 The Evolving Role of Stablecoins: From Trading Medium to Financial Powerhouse
Stablecoins have far surpassed their original role as a medium of exchange in crypto markets. According to IMF data, last year, cross-border flows via stablecoins reached about $1.5 trillion—far exceeding the amounts transferred via Bitcoin or Ethereum.
The report notes that stablecoins are expanding as a cross-border payment method, serving as a bridge between volatile crypto assets and fiat currencies.
A concerning trend is accelerating "currency substitution" in emerging markets such as Africa, the Middle East, and Latin America. Locals are using stablecoins to hedge against the risk of domestic currency depreciation.
While this "dollarization" provides low-cost remittance services for financially vulnerable groups, it may also weaken the effectiveness of national monetary policy and lead to capital outflows.
03 Fragmented Regulatory Landscape and Global Impact
The "go-it-alone" approach to global regulation has become the greatest source of uncertainty.
The IMF’s report identifies regulatory fragmentation as one of the most pressing challenges. Differences in regulatory speed and priorities across jurisdictions can lead to regulatory arbitrage and market distortions.
If stablecoin issuers relocate to regions with looser oversight or build closed ecosystems with poor interoperability, the overall risk to the global financial system will rise.
This fragmentation affects not only individual countries’ financial security but also the stability of the international monetary system. The IMF warns that regulatory divergence may "lead to market inefficiencies and undermine financial stability."
04 Structural Deficiencies in the Stablecoin Market
Despite their massive scale, stablecoins have inherent structural flaws, as previously warned by the Bank for International Settlements (BIS) and central banks worldwide.
In its annual economic report, the BIS bluntly states that stablecoins perform poorly on the three key tests of money: singularity, elasticity, and integrity.
For "singularity," different stablecoins (such as USDT and USDC) may trade at prices deviating from their pegged value in secondary markets due to differences in issuers, reserve asset quality, and creditworthiness. This undermines the fundamental property of money as a unified measure of value.
In terms of "elasticity," stablecoins typically use a 100% reserve issuance model, meaning their supply cannot flexibly expand or contract in response to economic needs like the traditional banking system. This limits their ability to manage liquidity crises.
Regarding "integrity" (such as anti-money laundering and counter-terrorism compliance), stablecoins function as digital bearer instruments that can freely circulate across wallets and borders. They have inherent vulnerabilities in "Know Your Customer" (KYC) protocols, making them susceptible to illicit use.
05 Market Status and Dominance of Major Players
The stablecoin market is highly concentrated and deeply intertwined with traditional finance. According to DefiLlama data, as of December 2, the total stablecoin market capitalization exceeded $306.775 billion.
Tether’s USDT accounts for over 60% of the market, with a capitalization of about $184.572 billion. Circle’s USDC ranks second at approximately $76.982 billion.
The IMF report highlights a crucial impact: stablecoin issuers have become major buyers of U.S. short-term Treasury bills, holding about 2% of total U.S. debt issuance—a scale comparable to some central banks and sovereign wealth funds.
This trend has been reinforced by last year’s GENIUS Act in the U.S., which mandates that stablecoin issuers used for payments must hold reserves only in cash or safe assets like short-term Treasuries.
06 IMF’s Historical Framework and Gate’s Strategic Response
As regulatory environments grow more complex, cryptocurrency industry participants are proactively adjusting strategies to pursue compliant growth. In March 2025, the IMF incorporated crypto assets into its global economic reporting framework for the first time in the seventh edition of the Balance of Payments Manual, laying the groundwork for categorized regulation.
Under this framework, unbacked assets like Bitcoin are classified as nonproductive, nonfinancial assets, while liability-backed digital currencies such as stablecoins are explicitly treated as financial instruments. This classification provides important guidance for global regulators.
As a leading global exchange, Gate is actively adapting to these trends. Its strategic adjustments clearly reflect a commitment to innovation within a compliance framework.
For example, Gate recently lifted trading restrictions on mainstream cryptocurrencies like Bitcoin and Ethereum to support broader ecosystem development, while strengthening reviews for certain emerging tokens to protect user interests.
More importantly, to address potential regulatory freeze risks facing existing stablecoins like USDC and to expand permissionless business lines, Gate has announced plans to launch its native stablecoin, USDH.
According to its roadmap, USDH will be tailored to on-chain demand and activated via a transparent community voting process, strictly adhering to relevant regulatory requirements.
07 Industry Consensus and Prospects for Cooperation
Major global financial institutions have reached a preliminary consensus on core principles for stablecoin regulation. The Financial Stability Board (FSB) introduced the "same business, same risk, same regulation" principle in July 2023, which has become a cornerstone for international regulatory coordination.
The IMF report ultimately calls for strong international cooperation, emphasizing that addressing the challenges posed by stablecoins cannot rely solely on national regulation. Countries must work together to build a global regulatory framework that mitigates risks without stifling innovation.
For exchanges like Gate, this means embracing innovation while making compliance, transparency, and adequate reserves the foundation of growth.
By launching a native stablecoin and optimizing token listing reviews, platforms are not only responding to market demand but also actively integrating into the future global regulatory framework.
Outlook
Stablecoin issuers now hold about 2% of the total outstanding U.S. short-term Treasury debt, a level of influence comparable to major central banks. Meanwhile, over 90% of the stablecoin market is dominated by USDT and USDC, both pegged to the U.S. dollar.
In the realm of cross-border payments, stablecoin flows have reached about $1.5 trillion—far surpassing the combined cross-border flows of Bitcoin and Ethereum. This clearly outlines the rapid emergence of a new financial network running parallel to the traditional SWIFT system.
