The next currency crisis may be harder to contain because of stablecoins, New York Fed report shows

According to reporting by CryptoSlate, a New York Federal Reserve study indicates that future currency crises may be harder to contain due to the use of dollar stablecoins. Researchers Pablo Azar, Maryam Farboodi, and Nish Sinha found that wallets linked to countries experiencing financial turmoil were 1.8% more likely to receive dollar stablecoins during the week a crisis began.

The study examined nine episodes across eight countries between 2021 and 2025. The findings show that stablecoins give households and businesses a route to dollar exposure that bypasses domestic banking channels, which governments traditionally rely on to enforce capital controls and foreign-exchange restrictions.

While the research does not establish that stablecoins caused specific currencies to weaken, the observed activity supports the model that financial stress encourages stablecoin adoption. However, governments still retain enforcement points, as centralized issuers can freeze addresses and regulated exchanges can restrict transactions. The stablecoin market has grown past $300 billion, with projections indicating it could expand further, potentially altering how governments manage currency defenses during financial stress.