IMF Warns of Growing Stablecoin Risks in Brazil

The International Monetary Fund (IMF) has urged Brazil to strengthen oversight of its growing stablecoin market, warning that cross-border crypto flows are becoming increasingly sensitive to global financial shocks.

The IMF's latest Financial System Stability Assessment found that Brazil's digital asset market has expanded rapidly since 2017, with dollar-backed stablecoins emerging as a major source of cross-border activity.

Purchases of stablecoins respond two to three times more strongly to global financial shocks than portfolio investment or foreign direct investment, making them a potentially more volatile channel for transmitting external financial pressures.