BIS researchers have found that dollar-backed stablecoin inflows across more than 130 economies remain largely unaffected by capital controls, exposing a growing challenge for emerging-market governments.

The BIS study compared stablecoin inflows with foreign-currency bank deposits to examine how households and businesses gain exposure to the U.S. dollar during periods of financial stress. Both forms of dollarization increased alongside sovereign crises, banking problems and strong exchange-rate pass-through, but only traditional deposits responded clearly to restrictions on foreign currency and capital flows.

Unlike bank deposits, dollar-pegged tokens can move through crypto exchanges, peer-to-peer markets and self-hosted wallets without passing through domestic banks. According to the researchers, this difference likely exists because “stablecoins are partly circulating outside the regulatory perimeter.”

The results indicate that restrictions designed for bank accounts may have limited influence over digital tokens. While governments can require approval for foreign-currency deposits or restrict transfers through financial institutions, users can still receive, hold, and send stablecoins through blockchain networks.

Researchers also found that deposit and stablecoin dollarization tend to persist once established. Their analysis showed little evidence that users simply replace foreign-currency deposits with stablecoins, suggesting the two channels can expand at the same time instead of competing for the same demand.

Capital controls are failing to contain stablecoin demand

Dollar-pegged tokens could weaken monetary sovereignty if households and companies increasingly store or transact in U.S. dollars outside regulated banks, the BIS study warned. The risk is more pronounced in emerging and developing economies where inflation, currency depreciation or restricted access to foreign exchange makes dollar assets attractive.

Capital controls have historically reduced some forms of deposit dollarization because banks must enforce domestic rules. Stablecoin inflows, however, were broadly similar in economies with and without such restrictions, according to the BIS.

Digital tokens have bearer-like features and can be transferred through unhosted wallets, making complete enforcement difficult. The BIS Annual Economic Report 2026 noted that blocking domestic intermediaries from handling unapproved stablecoins may limit some transactions, but such measures are likely to remain imperfect.

Despite the concern over monetary sovereignty, the study found little evidence that moderate deposit dollarization materially weakens monetary-policy transmission. Economies with higher foreign-currency deposits did, however, show a somewhat higher risk of elevated inflation.

Stablecoins may present different policy problems because their use can extend beyond savings into payments, trade settlement and remittances. As transactions leave the banking system, authorities may also lose access to information normally collected by regulated financial institutions, limiting their view of capital movements.

The BIS findings suggest policymakers may require controls designed for blockchain-based assets rather than relying only on rules created for bank deposits. Any response would need to account for foreign exchanges, peer-to-peer transfers and self-hosted wallets, all of which can keep activity outside domestic financial channels.

Emerging markets are driving stablecoin payment adoption

Nigeria illustrates how economic pressure can push stablecoins into daily financial activity. The International Monetary Fund found that stablecoins accounted for more than 65% of the country’s cross-border crypto inflows in 2024, with total inflows approaching the value of recorded remittances by 2025.

According to the IMF, Nigerian households use USDT and USDC for family remittances, crypto investments and access to dollar-denominated value. Small and medium-sized importers have also used the tokens to pay foreign suppliers, while some large companies have tested them for trade settlement.

Inflation, naira depreciation and limited access to foreign currency made stablecoins more attractive during 2023 and 2024, the IMF reported. When the Central Bank of Nigeria restricted banks from serving crypto users in 2021, activity moved toward less regulated peer-to-peer markets instead of disappearing.

Stablecoins can cut payment time and reduce dependence on correspondent banks, according to the IMF. However, the institution warned that heavy use of dollar tokens could lower demand for the naira and move more transactions beyond the reach of Nigerian regulators.

A similar pattern has emerged in Latin America. Bitso Business reported an 81% year-over-year increase in stablecoin payment volume during the first half of 2026. The company also found that Tether’s USDT and Circle’s USDC represented 40% of regional crypto purchases in 2025, overtaking Bitcoin for the first time.

Across the crypto market, stablecoin capitalization has risen to about $309.7 billion from roughly $260 billion a year earlier. The increase gives dollar-backed tokens a larger role in payments and savings while adding urgency to the regulatory concerns identified by the BIS.

BIS research has also separated privately issued stablecoins from tokenized bank money. Through Project Agorá, eight central banks and more than 40 regulated institutions have tested cross-border settlement using tokenized commercial-bank deposits and central-bank reserves, according to the institution’s 2026 report.

That model keeps tokenized payments inside a regulated two-tier banking system, while stablecoins can circulate beyond it. For policymakers, the contrast explains why existing capital controls may struggle to contain digital dollarization even as demand for faster cross-border payments continues to grow.

The White House has accepted what it calls the most extensive federal ethics restrictions ever proposed as the CLARITY Act seeks the Democratic votes needed to clear the Senate’s 60-vote threshold.

Punchbowl News reported on Tuesday that White House officials reached an agreement on ethics language during talks with Republican Senators Cynthia Lummis and Bernie Moreno. The provision could apply to President Donald Trump’s crypto interests, although neither senator has released its wording or explained how it would be enforced.

A White House official confirmed the concession in a recent statement, describing the proposed language as “the most comprehensive and wide-ranging ethics provision in history.” According to the official, the administration had “bent over backward” to address concerns raised by Democratic lawmakers.

The agreement removes one of the main disputes holding up the Digital Asset Market Clarity Act, but it does not guarantee enough Democratic support for passage. The Senate has not published its final text or placed a floor vote on its calendar, leaving lawmakers with a limited window before the chamber’s August state work period.

Ethics deal removes a key Senate obstacle

Democratic senators have made restrictions on political crypto dealings a condition for supporting the legislation. Elizabeth Warren, Chris Murphy, Jeff Merkley and Chris Van Hollen previously argued that a market structure bill would be “worthless” unless it addressed Trump’s links to the digital asset industry.

Their concerns include Trump’s namesake memecoin and his family’s involvement with World Liberty Financial. Democrats have also requested congressional hearings into the president’s investments and other connections to crypto companies before the Senate holds a vote.

Details of the White House compromise remain unclear, including whether its limits would cover the president’s family and which authority would enforce them. Barron’s reported that some Democrats were concerned enforcement could rest only with the Trump-controlled Department of Justice instead of also allowing action by state attorneys general.

Earlier negotiations had shown how difficult the ethics issue could be. Patrick Witt, executive director of the President’s Council of Advisors for Digital Assets, told CoinDesk in May that the administration supported rules applying “from the president all the way down to the brand new intern on Capitol Hill,” but opposed provisions written against one official or family.

Senate negotiators have resolved or narrowed some other disputes while the ethics talks continued. Coinbase vice chair Ryan VanGrack recently said that Democrats had secured stronger customer safeguards, giving the Senate legislation “more teeth” than earlier versions.

“At the end of the day, this is about customer protections. The status quo lacks this infrastructure, lacks these protections, and the Democrats used this opportunity, wisely, to make sure that customers were first and foremost in [this bill].”

Stablecoin rewards, anti-money laundering controls, tokenized securities and protections for software developers have also complicated negotiations. As reported by crypto.news in May, the Senate Banking Committee advanced the bill with support from every Republican on the panel and Democratic Senators Ruben Gallego and Angela Alsobrooks, producing a 15-9 vote.

Despite backing the committee action, Gallego and Alsobrooks did not commit to supporting the eventual floor version because negotiations were still underway. Republicans would therefore need to preserve that support and attract more Democrats to reach 60 votes in the full Senate.

The House passed its CLARITY Act version in July 2025 during Republicans’ “Crypto Week.” The proposal would divide oversight of digital assets between federal regulators and set standards for deciding when tokens fall under securities or commodities rules.

Bitcoin rises while passage odds remain below 50%

Crypto-linked markets climbed after reports of the White House agreement. Bitcoin traded above $66,000 on Tuesday and reached a seven-week high, while Coinbase shares rose about 10% and Circle gained roughly 7%.

Prediction-market traders remained less convinced. A Polymarket contract shown on Tuesday assigned a 48% chance that the CLARITY Act would become law in 2026, down 17 percentage points, with about $2.11 million in recorded volume. The contract’s pricing indicated that traders still viewed passage as uncertain despite the reported ethics agreement.

President Trump had pressed senators to approve the legislation “in honor of” the late Senator Lindsey Graham, whom he described as a major supporter of the measure. Industry executives, including Coinbase representatives, have also urged Congress to establish federal market rules.

Still, the missing legislative text leaves the effect of the ethics compromise untested. Until Democratic senators review the provision, disclose their positions and help schedule a floor vote, the White House agreement remains a potential route to 60 votes rather than proof that the CLARITY Act will pass.

Bitcoin price has retreated from nearly $67,000 after escalating U.S.-Iran hostilities pushed oil prices higher and tempered optimism created by progress on the CLARITY Act.

According to data from crypto.news, Bitcoin (BTC) price rose from an intraday low of $65,149 to $66,965 on July 21 before sellers forced the price back to about $66,440. The asset remained up 1.8% on the day, but its failure to hold $67,000 showed that traders were unwilling to chase the rally as energy and inflation risks returned.

CLARITY Act progress and ETF inflows have fueled Bitcoin’s rally

Bitcoin’s advance began after the White House and Senate negotiators reached an agreement on an ethics provision that had delayed the Digital Asset Market Clarity Act. Treasury Secretary Scott Bessent described negotiations as being at the “1-yard line,” while senators suggested the bill was close to a final vote.

The proposed ethics rules address concerns about elected officials and senior government figures holding or promoting crypto assets while in office. Reports that President Donald Trump had accepted the provision helped crypto-linked stocks rally, with Coinbase and Circle shares gaining as much as 10% during the session.

U.S. spot Bitcoin exchange-traded funds added another source of demand. According to SoSoValue data, the funds recorded about $227 million in net inflows on July 20, their fifth consecutive positive session and their longest inflow run since April.

The ETF streak followed a difficult June, when investors withdrew billions of dollars from the products. Five days of fresh allocations have helped absorb available supply while Bitcoin has recovered from its June low near $58,000.

Spot activity also remained firm during the latest advance. Commenting on the order flow, analyst Ted Pillows wrote:

“Consistent spot buying for BTC now. This looks much better.”

Leverage amplified the initial breakout. Market data showed roughly $223 million in crypto positions liquidated over 24 hours, including about $181 million in shorts. Forced purchases by bearish traders helped Bitcoin clear $65,000 and accelerate through the $66,000 resistance area.

A separate derivatives event later exposed the rally’s fragility. According to trader Daan Crypto Trades, a position worth more than $100 million appeared to close at market, erasing over $250 million in Bitcoin open interest within one minute.

BTC briefly fell toward $65,900 before recovering most of the decline, which Daan attributed to a possible execution error or an attempt to trigger cascading liquidations.

Oil risks and overhead supply have blocked a clean $67,000 breakout

Oil prices have complicated the bullish setup. U.S. crude climbed about 2.6% to $84.70 per barrel, its highest level since June 12, as supply fears grew across the Strait of Hormuz and the Red Sea.

Washington carried out a tenth consecutive day of strikes against Iran, while Trump warned that Tehran “will pay” for attacks that killed American soldiers. Reuters also reported damage to a tanker near the Strait of Hormuz and disruption involving Saudi crude shipments after threats from Iran-aligned Houthi forces.

Higher energy costs could feed into July inflation and give the Federal Reserve less room to support financial markets. The dollar strengthened as traders reassessed the chances of higher interest rates, creating a potential headwind for Bitcoin and other speculative assets.

On the daily chart, BTC has moved above the Bollinger Band midpoint at $63,839 and briefly exceeded the upper band near $66,100. Trading above the upper band confirms strong buying pressure, but the rejection from $66,965 raises the risk of a pullback toward the band’s midpoint.

The Average Directional Index stood at 23.08. A reading below 25 means the daily trend has not yet gained enough strength to confirm a sustained directional move, despite Bitcoin’s recovery from the June trough.

Bitcoin has also reached the upper boundary of an ascending parallel channel on the four-hour chart. Resistance sits between $67,000 and $67,800, while the channel floor runs near $64,000. A four-hour close above $67,800 would clear the structure and expose $69,500, followed by the psychological $70,000 level.

Momentum still favors buyers. The four-hour MACD line stood at 592.66, above its 441.46 signal line, while the positive histogram reached 151.19. The Chaikin Money Flow reading of 0.35 showed that capital continued to enter the market despite the rejection.

CoinGlass’ three-day liquidation heatmap places the closest overhead leverage around $66,800 to $67,300, with another concentration near $68,000. A move through those levels could force additional short closures. Below price, liquidation pools appear around $65,300, $64,800, and $64,200.

The bullish case would weaken if BTC closes below the channel floor and loses the daily Bollinger midpoint near $63,800. Such a breakdown could expose the lower daily band at $61,578, while renewed oil gains, further military escalation, or declining ETF inflows would add pressure. Bitcoin must therefore convert $67,000 into support before the latest recovery can extend toward $70,000.

Key takeaways:

• Despite ETH’s price gains, weak onchain activity and low DEX volumes signal trader caution.
• Record Ethereum staking at 34% reduces sell pressure, yet sustained upside needs external catalysts.

Ether (ETH) tested the $1,950 mark for the first time in seven weeks on Tuesday, triggering $62 million in liquidations across leveraged bearish positions. The move delivered 29% gains from the $1,500 low on June 26 and aligned with the broader risk-on mood that drove Bitcoin (BTC) above $66,500. Can ETH push through to $2,100?

Total crypto market capitalization (left) vs. ETH/USD. Source: TradingView

Ether’s price largely tracked the overall crypto market trend, which shifted to positive momentum in July. Tuesday’s gains in the US stock market helped ease investor worries about stretched valuations after the artificial intelligence stock rally. Traders expect solid corporate earnings after 3M Company (MMM US) reported results Tuesday morning.

Google’s parent, Alphabet, is expected to report quarterly results on Wednesday after US stock markets close. Investors look for 64% growth in cloud services revenue amid heavy AI investments. Strong earnings could restore confidence and help push the cryptocurrency market past the $2 trillion total capitalization mark.

Weak Ethereum onchain metrics and muted ETH derivatives persist

Despite recent ETH price gains, Ethereum onchain metrics show stagnation. Demand for blockchain processing has not recovered to levels seen six months ago, partly because traders are showing less interest in memecoins and utility tokens. Some of Ethereum’s top projects posted losses of 50% or more year-to-date, including Ethena (ENA), Mantle (MNT) and Arbitrum (ARB).

Ethereum network weekly DEX volumes & DApps revenues, USD. Source: DefiLlama

Weekly revenue for Ethereum’s decentralized applications (DApps) fell to the lowest levels since September 2024, hitting $9.8 million. Among the strongest performers are Sky (formerly MakerDAO) at $3.2 million in weekly revenue and Chainlink, which brought in $1.2 million over the same period. Overall, decentralized exchange (DEX) volumes dropped to $7.2 billion per week.

Ethereum’s weak onchain data mirrors the subdued mood in derivatives markets.

ETH perpetual futures annualized funding rate. Source: Laevitas

The annualized funding rate on ETH perpetual futures has struggled to remain within the neutral 6%-12% range over the past month. Still, sentiment has improved from the negative rates seen in late June, which reflected heavy bearish demand. Rising interest in Ethereum staking has likely boosted trader expectations for price gains and reduced downside risks.

Ethereum staking data. Source: StakingRewards

According to Staking Rewards data, a record-high 34% of all ETH supply is now staked, up from 33% one month earlier. Analysts expect reduced sell pressure as long-term holders keep accumulating supply, including Tom Lee’s Bitmine Immersion (BMNR US), which added 156,719 ETH over the past month. The company now controls 4.8% of available supply.

ETH price is 61% below the all-time high from August 2025, which helps explain why bulls lack enthusiasm in derivatives markets. The soft on-chain metrics and six-month bear market have left traders skeptical about sustained upside.

Ether’s path to $2,100 likely depends on reduced risk aversion across markets, which makes Google’s revenue guidance on Wednesday especially important.