Decrypting Crypto: How to Estimate International Stablecoin Flows

Summary

This paper presents a novel methodology-leveraging a combination of AI and machine learning to estimate the geographic distribution of international stablecoin flows, overcoming the "anonymity" of crypto assets. Analyzing 2024 stablecoin transactions totaling $2 trillion, our findings show: (i) stablecoin flows are highest in North America ($633bn) and in Asia and Pacific ($519bn). (ii) Relative to GDP, they are most significant in Latin America and the Caribbean (7.7%), and in Africa and the Middle East (6.7%). (iii) North America exhibits net outflows of stablecoins, with evidence suggesting these flows meet global dollar demand, increasing during periods of dollar appreciation against other currencies. Further, we show that the 2023 banking crisis significantly impeded stablecoin flows originating from North America; and finally, offer a comprehensive comparison of our data to the Chainalysis dataset.

Subject: Blockchain and DLT, Technology

Keywords: Asia and Pacific, Blockchain and DLT, Capital flight, Capital flow management measures (CFMs), Capital flows, Caribbean, Crypto assets, Currency substitution, Dollar demand, East Africa, Middle East, North America, Stablecoins