Stablecoins, pegged to fiat currencies like the U.S. dollar, have quickly grown into a major feature of global finance. By mid-2025, the top two – USDT and USDC – together had a market capitalization exceeding $215 billion. Globally, their role is no longer confined to crypto trading but they are being increasingly used for cross-border payments and remittances. For policymakers, this raises a central challenge: how do you track these flows when all you see are wallet addresses on blockchains?
A new IMF working paper, Decrypting Crypto: How to Estimate International Stablecoin Flows (July 2025), offers one of the first credible answers. Authored by Marco Reuter, the study introduces a data-driven methodology to link pseudonymous blockchain activity with real-world geography. By analysing more than 12 billion transactions across six major blockchains, the paper builds a global picture of stablecoin flows that can finally be compared, quantified, and tested against macroeconomic signals.
Mapping flows from wallets to regions
The breakthrough of this paper lies in how it assigns geography to wallets. Roughly 346,000 wallets were “labelled” using two techniques: first, linguistic analysis of Ethereum Name Service (ENS) domain names by a large language model, which identifies cultural and regional markers in names; second, identifying wallets that mostly interact with region-focused centralized exchanges. These labelled wallets then train a machine learning model to spot behavioural patterns such as time-of-day activity, daylight-saving adjustments, and transaction links with major CEXs.
The model predicts wallet origins with around 65% accuracy – well above random chance – and is particularly strong for Asia-Pacific users. Once scaled to 20 million wallets, this becomes the basis for a 2024 global flow matrix built on 138 million transfers worth over $2 trillion. The dataset shows not just totals but also bilateral flows between regions and exchanges, offering a view that is both wide and granular.
What the 2024 picture reveals
- Scale by region: North America and Asia-Pacific dominate in absolute dollar volumes, but it is Latin America & the Caribbean (7.7%) and Africa & the Middle East (6.7%) that stand out when compared on GDP basis. In these emerging regions, flows are overwhelmingly cross-border rather than intra-regional, consistent with remittances and international use.
- North America’s role: Net outflows of $54 billion make North America the world’s main source of digital dollars, with outflows intensifying when the dollar strengthens. In effect, stablecoins are becoming a parallel channel for meeting global dollar demand.
- Transaction patterns: Average ticket sizes are much higher in advanced economies (around $35,000 in North America) compared to emerging markets (around $11,000 in Asia-Pacific), broadly reflecting income levels. USDT is more popular in emerging economies, while USDC has greater adoption in developed markets. Binance plays the role of a global on-ramp, with its flows into self-custody far exceeding flows back, while Coinbase appears to serve as an off-ramp.
- China spotlight: The paper estimates gross flows of $153 billion and net inflows of $18.6 billion into China in 2024 – much larger than commercial datasets suggest. A key reason is the widespread use of VPNs to access Binance, which earlier methods fail to capture.
- Banking links: The 2023 U.S. banking crisis, when several crypto-linked banks failed, sharply disrupted North American stablecoin flows. This demonstrates how closely stablecoins remain tied to traditional financial plumbing.
The paper also compares its dataset with that of Chainalysis, a commercial provider often used in research. While both agree on overall volumes and regional rankings, they diverge on the direction of certain “indirect” flows and on the scale of Chinese usage – highlighting how different assumptions (such as ignoring VPNs or assuming uniform transaction sizes) can produce very different pictures.
Why this matters for India
The most important takeaway from this paper is that stablecoin flows can be measured systematically. What once seemed opaque can now be turned into quantifiable data with clear policy value. For India, which combines one of the largest remittance markets in the world with a fast-growing digital ecosystem, such a framework has direct implications.
First, it gives macroeconomic visibility. Tracking net in- and outflows of stablecoins to Indian wallets could complement foreign exchange monitoring, especially during times of dollar stress. Second, it helps distinguish use cases: remittance corridors can be separated from large-ticket institutional flows, allowing for proportionate regulation. Third, it shines a light on market structure – understanding whether Indian users are relying more on USDT or USDC, and whether Binance or other exchanges are the main conversion points, is key for consumer protection. Finally, it provides an early-warning lens: just as U.S. banking stress spilled into stablecoin flows, India can build indicators to spot similar transmission channels at home.
With tools like these, regulators no longer need to view stablecoin mechanisms as blackbox, instead they can be monitored, mapped, and understood. For India, adopting a data-first approach would allow rules to be shaped by evidence rather than assumptions. Stablecoins are already part of the financial landscape; the task now is to measure them well, so they can be regulated smartly.