Stablecoin Shocks

Eugenio Cerutti, Melih Firat, Martina Hengge and Takaaki Sagawa

No 2026/044, IMF Working Papers from International Monetary Fund

Abstract: We develop novel measures of stablecoin shocks and use them to identify the causal effects of stablecoin adoption on U.S. financial markets. Combining a daily narrative dataset of stablecoin-specific news with changes in the combined market capitalization of USDC and USDT, we measure high-frequency movements in stablecoin market capitalization and implement heteroskedasticity-based identification within an event-study and SVAR-IV framework. Stablecoin demand shocks have triggered persistent declines in short-term Treasury yields, a depreciation of the U.S. dollar, and gradual spillovers into crypto and equity markets. We also document heterogeneous effects across firms: payment providers benefit from greater stablecoin adoption, whereas banks—including community and small banks—show no evidence of priced disintermediation risk. Our findings highlight stablecoin demand as a novel channel of asset-market transmission.

Keywords: Stablecoin; Payment Systems; Crypto; Financial Markets; Stablecoin demand shocks; Stablecoin shock; stablecoin adoption; IMF working papers; stablecoin market capitalization; Market capitalization; Vector autoregression; Stock markets; Treasury bills and bonds; Global; Europe (search for similar items in EconPapers)
Pages: 40
Date: 2026-03-06
New Economics Papers: this item is included in nep-fdg, nep-ifn, nep-mon and nep-pay
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