The Financial Stability Board said in a report that global stablecoins have not been tested under severe stress or insolvency, and it called for more cross-border information sharing, monitoring and planning for stablecoin distress or failure. The G20's financial watchdog said national regulatory frameworks are developing at different speeds, raising questions over how holders would recover their funds if an issuer went under, and that the stablecoin market began 2025 at around $206 billion in capitalization and has grown to $306 billion, most of that value in coins pegged to the U.S. dollar.
FSB says stablecoins are untested in a crisis, calls for cross-border planning
The Financial Stability Board said in a report that global stablecoins have not been tested under severe stress or insolvency, and it called for more cross-border information sharing, monitoring and planning for stablecoin distress or failure. The G20's financial watchdog said national regulatory frameworks are developing at different speeds, raising questions over how holders would recover their funds if an issuer went under, and that the stablecoin market began 2025 at around $206 billion in capitalization and has grown to $306 billion, most of that value in coins pegged to the U.S. dollar.
"Global stablecoin arrangements are inherently cross-border, yet national regulations are taking shape at different speeds and cross-border cooperation in this area is still in its infancy," FSB Chair Andrew Bailey wrote in an accompanying letter. Bailey, who also serves as governor of the Bank of England, has in the past warned that international stablecoin rulemaking had stalled.
The report points to higher risks in multi-issuer structures, in which affiliated companies can issue the same stablecoin and share liability for it while keeping reserve assets in separate jurisdictions. If holders can redeem with any issuer in the group, demand could pile up on a single entity while the needed assets sit elsewhere, and moving those reserves may become harder during a crisis, the FSB said. Legal claims could also become unclear if an issuer fails, and it may be difficult to determine which country's insolvency rules would apply.
Stablecoins can trade around the clock while the markets for the assets backing them have set operating hours. The FSB said that mismatch could matter during a run, because if redemptions cannot keep pace with selling, a token may lose its peg. The report noted that deep, liquid secondary markets could also help pull a token back toward its peg through arbitrage. Forced reserve sales and bank deposit withdrawals could then spread the shock into traditional financial markets as investors scramble for liquidity.
The FSB also pointed to weak data as a problem, saying the pseudonymous nature of cryptocurrency transactions can make it hard to tell where holders are based and which jurisdiction applies.
The FSB's recommendations are not legally binding, but its members tend to commit to putting agreed standards into practice nationally. The report comes just days ahead of a meeting of G20 finance ministers and central bank governors on Oct. 15. The source article carries a disclosure that parts of it were generated with the assistance of AI tools and reviewed by the editorial team.
The FSB said much of the value in stablecoins is used mainly to move in and out of crypto investments, and that the coins could eventually enable faster, cheaper payments, including across borders.
- The source does not state how many FSB members have committed to putting the agreed standards into practice nationally, or on what timetable.
- The source does not name any stablecoin issuer and does not identify which jurisdictions' regulatory frameworks it assessed.
- The source does not state the size of reserves held in multi-issuer structures or estimate the scale of a potential redemption run.
- The source does not give a publication date for the FSB report beyond the article's timestamp of Oct 12, 2026.
- The source does not state the date of the $306 billion capitalization figure or reconcile it with the figure of around $206 billion at the start of 2025.
- The source does not clarify the garbled wording of its sentence on insolvency rules, which reads 'as it It may be difficult to determine which country's insolvency rules would apply.'