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Stablecoin Shocks

Author

Listed:
  • Mr. Eugenio M Cerutti
  • Melih Firat
  • Martina Hengge
  • Takaaki Sagawa

Abstract

We develop novel measures of stablecoin shocks and use them to identify the causal effects of stablecoin adoption on U.S. financial markets. Combining a daily narrative dataset of stablecoin-specific news with changes in the combined market capitalization of USDC and USDT, we measure high-frequency movements in stablecoin market capitalization and implement heteroskedasticity-based identification within an event-study and SVAR-IV framework. Stablecoin demand shocks have triggered persistent declines in short-term Treasury yields, a depreciation of the U.S. dollar, and gradual spillovers into crypto and equity markets. We also document heterogeneous effects across firms: payment providers benefit from greater stablecoin adoption, whereas banks—including community and small banks—show no evidence of priced disintermediation risk. Our findings highlight stablecoin demand as a novel channel of asset-market transmission.

Suggested Citation

  • Mr. Eugenio M Cerutti & Melih Firat & Martina Hengge & Takaaki Sagawa, 2026. "Stablecoin Shocks," IMF Working Papers 2026/044, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2026/044
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