CoinDesk
The Financial Stability Board warned that global stablecoins remain untested under severe market stress or issuer insolvency as national rules develop at different speeds. The market has grown from about $206 billion at the start of 2025 to $306 billion, increasing the potential reach of a cross-border disruption. FSB Chair Andrew Bailey said global stablecoin arrangements are inherently cross-border, while cooperation remains in its infancy.
Why it matters
The FSB highlighted multi-issuer structures as a key weakness. Affiliated companies can issue the same stablecoin while holding reserves in separate jurisdictions. If holders can redeem through any issuer, demands could concentrate on one entity while the assets needed to meet them remain elsewhere. A failure could also create uncertainty over which country's insolvency rules apply.
Stablecoins trade around the clock, but the markets holding their reserves operate on set schedules. During a run, that mismatch could slow redemptions and pressure a token's peg. Pseudonymous transactions may further obscure where holders are based and which authorities have jurisdiction.
Market impact
The FSB called for stronger cross-border information sharing, monitoring and planning for stablecoin distress or failure. Its recommendations are not legally binding, but members generally commit to putting agreed standards into national practice.
A loss of confidence could force reserve sales or bank deposit withdrawals, spreading stress into traditional markets. Deep secondary markets and arbitrage can help restore a peg, but the FSB's warning puts redemption mechanics, reserve mobility and legal clarity at the center of stablecoin oversight ahead of the G20 finance meeting on Oct. 15.
Frequently asked questions
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What stablecoin risk did the FSB identify?
The FSB said global stablecoins remain untested under severe market stress or issuer insolvency, while national rules and cross-border cooperation are developing at different speeds.
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Why are multi-issuer stablecoins vulnerable in a crisis?
Affiliated issuers may hold reserves in separate jurisdictions while allowing redemption through any issuer. Demand could concentrate on one entity even when the needed assets are elsewhere.
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How large is the stablecoin market cited by the FSB?
The market grew from about $206 billion at the start of 2025 to $306 billion, with most of the value in tokens pegged to the U.S. dollar.
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How could 24/7 stablecoin trading affect a run?
Stablecoins trade around the clock, while markets holding their reserve assets operate on set schedules. That mismatch could slow redemptions and put pressure on a token's peg.
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What measures did the FSB recommend?
The FSB called for more cross-border information sharing, monitoring and planning for stablecoin distress or failure. Its recommendations are not legally binding.
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