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  • 🥶 IMF throws cold water on the stablecoin rebellion

🥶 IMF throws cold water on the stablecoin rebellion

PLUS: The Fund says crypto’s biggest product reinforces U.S. Treasuries, Aave pivots DeFi toward solar and semiconductors, mining difficulty drops, Vitalik questions prediction markets, and Coinbase stock rebounds 16%.

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Cryptopolitan News
February 16, 2026 • Estimated Reading Time: 8 minutes

For years, the stablecoin was simply crypto’s emergency exit, borderless money you could move 24/7 without needing banks in the middle. A parallel system.

The I.M.F. just threw cold water on that narrative.

The stablecoin boom isn’t upending the dollar system, the I.M.F. says in a new report.

The vast majority of major stablecoins are backed by short-term U.S. Treasuries and repos. In other words, they’re acting as a private distribution network for U.S. dollars, not an alternative to it.

Quick explainer:

Stablecoins like USDC and USDT purport to be redeemable one-to-one for a dollar. To be able to cover those costs, issuers own assets denominated in dollars, most typically Treasury bills.

That means:

The larger stablecoins get, the more shorter-term U.S. debt they hold, the more they become entwined with the old, legacy financial system.

The world’s total stablecoin market now totals more than $300 billion, nearly double in just a few years. About 97% of issuance is dollar-linked, and over 90% of market cap resides in USDC and USDT.

That’s not decentralization. That’s concentration.

The real fear of the IMF: dollarization in a race to the bottom

The IMF is not only concerned about market structure. It’s worried about currency substitution.

In nations with weak institutions, rampant inflation or capital controls, people may be more likely to use dollar-pegged stablecoins in place of the local currency. That could:

  • Erode the control of central banks over capital movements

  • Increase volatility in fragile economies

  • Fragment payment systems

In English: If families and companies decide to switch to using stablecoins instead of local money, governments lose control over monetary policy.

Stablecoins are not only faster at moving money. They can get the money out of jurisdictions more quickly.

But it’s not all doom

The IMF also recognizes the brighter side. In numerous emerging economies, mobile payments have already leapfrogged legacy banking. Properly regulated stablecoins could:

  1. Lower cross-border payment costs

  2. Increase competition

  3. Expand financial access

The tension is clear. Stablecoins could democratize dollar access. Or they could do so quietly, centralizing financial power in a few private issuers of debt against the United States.

Indeed, as historians of the market such as Niall Ferguson and Manny Rincon-Cruz have argued, stablecoins backed by fiat are becoming increasingly similar to payment rails rather than speculative crypto tokens.

The question is now not whether stablecoins survive. It’s whether they become:

  • Regulated extensions to the bank system

  • Or a shadow dollar layer running parallel to it.

  • According to the IMF, we seem to be already sliding into scenario one.

And if that is true, crypto’s most successful product could be not a rebellion against finance. Maybe it’s the latest limb.

POLL: Are stablecoins replacing banks, or reinforcing them?

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📊 Market Watch

🌱 Aave believes that DeFi should finance the real world

Stani Kulechov has a new fixation.

Not tokenized T-bills. Not yield games.

Solar farms. Robotics. Energy storage. Semiconductors.

In a new roadmap published on Thursday, the Aave founder makes the case that DeFi isn’t quite ready for prime time. Its next explosive chapter is unlikely to emerge from “scarce” things like bonds or real estate, he wrote. It will flow from what he calls abundance, productive infrastructure that can be scaled globally.

The pitch is pretty simple: tokenize a $100M solar project, run 70% of the financing on-chain, and then allow investors to rotate in and out rather than liquify their capital for two decades. The same dollar builds multiple times over the course of history.

Aave is even closing side brands like Avara to concentrate solely on the lending protocol.

⛏️ Bitcoin mining just got easier

Bitcoin’s mining difficulty experienced its biggest decrease in six months.

That typically means one thing: some miners gave up.

With BTC edging close to, or dipping below estimated production costs, smaller operators are tapping off rigs. When hashpower falls off, difficulty comes down. The miners who are left go to fractional-magnitude orders of marginal improvements.

The network isn’t in danger. The big pools continue to be strong.

But this is stress.

And historically, extended bouts of mining distress have frequently coincided with ugly phases in the market, and at times even near bottoms.

🎯 Vitalik doesn’t love prediction markets

At an October 6th event, Ethereum co-founder and blockchain mogul Vitalik Buterin went into detail on why he has soured on so-called prediction markets.

This week, Vitalik Buterin had a turn rolling on the floor of X with a somewhat different sound from last year.

Back then, he offered a defense of prediction markets as healthier than regular markets.

Now? He thinks they’re drifting.

What worries him is that ultra-short-term bets: 15-minute crypto markets, rapid dopamine trades , are beginning to crowd out the space. Vitalik’s not saying scrap them. He’s saying redirect them.

 🐥 Top tweets

Chart our Analyst is watching

Last week, we covered Coinbase after what felt like a grenade-drop earnings report.

This week? The stock just ripped 16% in a single session.

Shares closed at $164.32, up more than $23 on the day, after opening around $141 and grinding higher into the close. The move came as Brian Armstrong highlighted something interesting: retail users have been quietly accumulating Bitcoin and Ethereum during the recent dip.

In plain English: while headlines screamed panic, users were buying.

Armstrong noted that February wallet balances were actually higher than December levels. Classic “buy the dip” behavior. BTC and ETH made up most of that activity.

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