The Financial Stability Board says global stablecoins have not been tested under severe stress or insolvency. It wants more cross-border information sharing, monitoring and planning for stablecoin distress or failure.
The Financial Stability Board (FSB) warned that global stablecoins remain untested in a market crisis and could expose gaps in cross-border financial rules. The G20's financial watchdog urged regulators to share more information across borders and plan for failures.
The report says national stablecoin frameworks are developing at different speeds, which raises questions over how holders would recover their funds if an issuer went under. According to FSB Chair Andrew Bailey: "Global stablecoin arrangements are inherently cross-border", as he wrote in a letter accompanying the report.
Multi-issuer structures draw the sharpest warning
The FSB points to higher risks in multi-issuer structures, where affiliated companies issue the same stablecoin and share liability for it while keeping reserves in separate jurisdictions. If holders can redeem with any issuer in the group, demand could pile up on one entity while the needed assets sit elsewhere.
Crypto Briefing reports that the FSB named Circle's USDC and Paxos Global Dollar as examples of multi-issuance arrangements. Moving reserves may become harder during a crisis, and it may be difficult to determine which country's insolvency rules would apply, the FSB said.
Round-the-clock trading meets fixed market hours
Stablecoins can trade around the clock, while the markets for the assets backing them have set operating hours. That mismatch could matter in a run: if redemptions cannot keep pace with selling, a token may lose its peg, the report said.
However, the FSB 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 flagged weak data, because the pseudonymous nature of crypto transactions can make it hard to tell where holders are based and which jurisdiction applies.
Market size and the G20 timing
The stablecoin market started 2025 at around $206 billion and has grown to $306 billion, with most of that value in coins pegged to the U.S. dollar. The FSB's recommendations are not legally binding, but members tend to commit to putting agreed standards into practice nationally.
The report arrives just days ahead of the G20 finance ministers and central bank governors' Oct. 15 meeting.
Sources: CoinDesk, Crypto Briefing
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