• IMF releases a detailed report on the global rise of stablecoins and current regulatory gaps.
• Calls global regulation “fragmented” and warns of interoperability issues.
• Says strong macro-policies and robust institutions are the first line of defense, not regulations alone.
• Confirms USDT and USDC are mainly backed by short-term U.S. Treasurys.
• Stablecoin market now exceeds $300 billion, mostly dollar-pegged.
• The U.S. is implementing the GENIUS Act to build a full stablecoin framework.

The International Monetary Fund has released a new report analyzing the rapid growth of the stablecoin market and how well global regulations are keeping up. The report, titled Understanding Stablecoins, reviews how major regions — including the U.S., U.K., Japan and the European Union — have approached regulation as stablecoins become more significant in global finance.

According to the IMF, many of the new regulatory frameworks can reduce some risks, but the overall global landscape remains inconsistent. Different countries have adopted different rules, and stablecoin issuers design their products in different ways, which creates a fragmented environment. The IMF warned that this fragmentation could lead to inefficiencies, especially because many stablecoins operate on different blockchains and exchanges, making interoperability a challenge.

The report explained that these differences can create obstacles for international usage, cross-border transactions, and policymaker cooperation. As countries apply their own regulatory treatments, this can lead to additional friction and even slow down innovation. Despite these ongoing efforts, the IMF argues that regulation alone is not enough to fully address the underlying risks.

Instead, the organization highlighted that strong macroeconomic policies and reliable institutions should be the first line of defense against potential stablecoin risks. This means maintaining financial stability, ensuring strong governance structures and supporting healthy economic conditions. The IMF emphasized that international coordination is essential, as no single country can effectively manage stablecoin risks on its own.

The report also reviewed the reserve structures of the two largest stablecoins in the world, Tether’s USDT and Circle’s USDC. Both are mainly backed by short-term U.S. Treasurys, reverse-repo positions involving Treasurys, and bank deposits. According to the data, around 40% of USDC’s reserves and 75% of USDT’s reserves consist of short-term U.S. Treasurys. Tether also holds roughly 5% of its reserves in Bitcoin. These holdings show how closely tied stablecoins have become to U.S. government debt markets.

Although the stablecoin ecosystem is dominated by U.S. dollar-pegged assets, some issuers have created euro-denominated stablecoins and other currency options. Still, the market remains heavily U.S.-centric. As of December, the global stablecoin market has grown to more than $300 billion.

In the United States, regulators are now implementing the GENIUS Act, which President Donald Trump signed into law in July. The act aims to create a full regulatory framework for payment stablecoins in the country. Recent findings from blockchain security firm CertiK suggest that the implementation of this act has already begun reshaping liquidity, dividing it into separate pools for U.S. and EU-based stablecoin markets.

Overall, the IMF report highlights a global financial environment where stablecoins are expanding rapidly, but regulatory approaches are evolving at different speeds. As the market grows larger and more interconnected, coordinated global action may become increasingly important.

Final Thought

The IMF’s message is clear: stablecoin growth is accelerating, but regulation alone cannot manage the risks. Strong economic foundations, international cooperation and consistent global standards will be essential as stablecoins become a larger part of the financial system.