The Bank for International Settlements (BIS) has published the empirical case for something emerging-market central bankers have been describing anecdotally for two years: dollar stablecoin flows do not respond to capital controls, while foreign-currency bank deposits do. BIS Working Paper 1370, “Dollarisation and Monetary Control: What Lessons for the Rise of Stablecoins?”, released July 22, 2026, tested the proposition across more than 130 economies and found the two behave as different asset classes under the same restrictions.

The finding matters because it separates a policy tool that works from one that does not. Capital controls were built for an intermediated system — a bank receives an instruction, applies a rule, and either executes or blocks. A bearer token moving between unhosted wallets has no such chokepoint. The BIS paper’s contribution is showing the gap is measurable, not theoretical.

What the data shows

The BIS researchers compared how two categories of dollar exposure respond to foreign-exchange restrictions. Foreign-currency deposits behave like a conventional financial variable: when controls tighten, flows reflect the policy. Stablecoin inflows show little reaction to the same measures.

The scale context makes the divergence material rather than a curiosity. Roughly 99.4% of fiat-backed stablecoins by market value are pegged to the dollar, in a market worth around $320 billion as of end-May 2026. Bitso Business reported an 81% year-on-year increase in stablecoin payment volume across the first half of 2026.

The mechanism the paper identifies is structural rather than behavioural. Stablecoins carry bearer-like features and can move through self-custodied wallets, which means enforcement has no natural intermediary to instruct. That is a design property, not a compliance failure by any particular issuer.

The Venezuela case already ran this experiment

The BIS finding is not a forecast. It describes something already observable in the jurisdictions with the tightest controls.

Venezuela operates one of the most restrictive foreign-exchange regimes in the hemisphere, and USDT volume there has reached 75% of the value of the country’s oil exports on peer-to-peer venues. That is not a market circumventing a rule at the margin — it is a parallel dollar system operating at macroeconomic scale inside a country whose formal controls remain in force.

Read alongside Working Paper 1370, the Venezuelan data stops looking like an outlier and starts looking like the control group. The BIS has now generalised it across 130-plus economies.

Why central banks are reaching for balance-sheet tools instead

If capital controls do not bind stablecoin flows, the policy response shifts to the points that remain intermediated: issuance, reserves and bank exposure. That is precisely where the regulatory activity has concentrated.

The Bank of England has proposed a £40 billion systemic stablecoin cap, an issuance-side constraint rather than a flow-side one. The Basel Committee’s 1,250% crypto capital rule has reopened, with the US and UK weighing opt-outs — a bank-exposure constraint. Neither attempts to stop a token moving between two wallets, because neither can.

BIS General Manager Agustín Carstens framed the underlying classification problem in April 2026, noting that although stablecoins had reached “hundreds of billions of dollars in circulation and trillions in transaction volume, they still behave more like financial instruments than money.” Working Paper 1370 supplies the monetary-sovereignty corollary: an instrument that behaves like a financial product but settles like cash is hard to fit into either supervisory box.

What this means for brokers and payment firms

For firms operating across emerging markets, the paper is a compliance signal rather than a commercial one. A jurisdiction whose capital controls are being bypassed at scale tends not to respond by liberalising. It responds by extending obligations to whatever intermediary it can reach — exchanges, on- and off-ramps, licensed payment institutions and the banks serving them.

The near-term expectation is not new capital controls. It is tighter licensing and travel-rule enforcement at the fiat boundary, because that boundary is the only place a national authority retains leverage. Firms running remittance or treasury corridors through dollar stablecoins in control-heavy jurisdictions should expect their banking partners to price that supervisory attention before the regulators formalise it.

Sources: Crypto Times on BIS Working Paper 1370, Cointelegraph, crypto.news, and CoinDesk on Carstens’ April 2026 remarks.

Related coverage on The Industry Spread: Venezuela USDT volume at 75% of oil exports, the Bank of England’s £40bn stablecoin cap, and Basel’s 1,250% crypto capital rule reopening.

Karthik Subramanian

Karthik Subramanian is a founder, writer, and technology consultant with nine years in the crypto ecosystem. He covers token economics, L1/L2 infrastructure, DeFi protocols, wallets/custody, and the bridge between crypto and forex—broker technology, liquidity, and macro drivers. Karthik’s writing focuses on clear, practical frameworks that help professionals evaluate new products and on-chain innovation alongside FX market realities.