IMF Study Warns Stablecoins Could Erode $300 Billion in Payment Firm Value

An IMF study has raised concerns about the potential impact of stablecoins on traditional payment companies, suggesting they could pose a $300 billion threat. The study, titled “Stablecoins and the Future of Payments: Evidence from Financial Markets,” analyzed stock-market reactions following key votes on the GENIUS Act, which establishes a regulatory framework for payment stablecoins.

The research found that listed payment companies saw a 1% drop in stock returns compared to other financial firms during the five trading hours after the congressional vote. This decline translated to a $21.5 billion reduction in market capitalization. The study attributed this reaction to investors lowering their expectations for the future cash flows of incumbent payment firms rather than increased uncertainty.

Using prediction-market data, the researchers estimated that the legislation could lead to an 18% reduction in the aggregate market value of incumbent payment firms, potentially amounting to $300 billion. However, they noted this was a rough estimate, with sensitivity analysis suggesting a range of $220 billion to $470 billion. The impact was more pronounced for companies with greater exposure to cross-border payments, while firms with proprietary network effects or existing crypto services did not show significant declines.

The study also cautioned that stablecoin transaction volumes should not be taken as a direct measure of payment adoption. Citing Allium Labs, the paper noted that fewer than 10% of recorded stablecoin transactions involve genuine users, with the rest involving bot activity or transfers between wallets controlled by the same entity. The GENIUS Act mandates that designated payment stablecoins be backed 100% by liquid assets and requires monthly public reserve disclosures and audits for issuers.