IMF Warns Brazil Stablecoin Flows Outpace Traditional Capital 2-3x

According to its Financial System Stability Assessment released Thursday, the International Monetary Fund said Brazil's US dollar-pegged stablecoins have grown rapidly since 2017 and require stronger oversight. The IMF noted that cross-border crypto flows have been steadily increasing and are two to three times more sensitive to global shocks than traditional portfolio investment or foreign direct investment.

Brazil's central bank has already introduced regulations for crypto service providers, but gaps remain in customer asset protection, stablecoin issuance rules, and anti-money laundering compliance. The report stressed the crypto market is increasingly interconnected with the traditional financial system.