IMF: USDT and USDC Could Cut Cross-Border Payment Costs, But Risks Lurk

The International Monetary Fund (IMF) has assessed the potential of stablecoins like USDT and USDC to facilitate cross-border payments, suggesting they could reduce costs and speed up transactions.

However, the IMF's analysis also highlights that the full cost of sending these stablecoins extends beyond the blockchain transaction itself, including exchange fees, network charges, conversion spreads, and on- or off-ramp costs.

The IMF notes that traditional international payments often move through correspondent banking networks, which can be slow and costly. In contrast, USDT and USDC can transfer between blockchain wallets around the clock, settling in seconds or minutes depending on the network.

The IMF warns that faster and cheaper transfers could increase financial risks, including currency substitution, capital-flow volatility, and banking risks. The use of stablecoins may also weaken monetary policy transmission if households increasingly move savings into dollar-linked assets.