A new study from the Bank for International Settlements (BIS) — often referred to as the “central bank of central banks” — reveals that Bitcoin and stablecoins like USDT and USDC are increasingly being used during economic crises particularly in countries with high inflation strict capital controls or expensive and inefficient banking systems.

Key points:

• BIS confirms what many in the crypto community have believed: Bitcoin is not just an investment but also a “lifeline” in unstable economies.

• People turn to crypto when traditional financial systems collapse or become too costly.

• Cross-border crypto flows surged from under $7 billion in 2017 to a peak of $800 billion by the end of 2021. After a decline in 2022 it has rebounded to around $600 billion in Q2 2024.

• Initially Bitcoin accounted for 80% of cross-border transactions but now it’s less than 25%, as stablecoins have become more popular for payments and remittances.

• The use of crypto has grown significantly in countries with strict capital controls as people use it to bypass financial barriers.

• Additionally as global financial tensions rise (e.g., when the VIX index increases) the use of crypto also increases showing that even institutional investors and businesses turn to crypto during times of instability.