The Financial Stability Board (FSB) released a report warning that stablecoins have never been subjected to a major market shock. It urges regulators worldwide to improve data exchange and crisis-management frameworks.
Stablecoins lack stress-test history
According to the FSB, the rapid growth of fiat-pegged tokens—from roughly $206 billion in 2025 to about $306 billion now—has outpaced the development of consistent regulatory rules. The board notes that the existing national regimes differ in speed and scope, leaving uncertainty over how investors could retrieve funds if an issuer collapses.
Cross-border complications of multi-issuer structures
The report highlights that when several affiliated entities issue the same stablecoin, each may hold reserve assets in a different country. In a redemption surge, demand could concentrate on one party while the backing assets remain elsewhere, making swift transfers difficult. Determining which jurisdiction’s insolvency laws apply could also become contentious, adding legal ambiguity to an already stressed situation.
Continuous trading versus limited-hour reserve markets
Stablecoins trade 24/7, yet the markets for the assets that back them operate only during regular banking hours. This timing mismatch could exacerbate a run, as redemption requests may outstrip the ability to liquidate reserves, potentially breaking the peg. The FSB does acknowledge that deep secondary markets might provide arbitrage opportunities to restore price stability, but relies on sufficient liquidity.
Recommendations for global cooperation
To address these gaps, the FSB calls for more robust cross-border information sharing, ongoing monitoring of stablecoin activities, and coordinated planning for distress events. While the guidance is not legally binding, member jurisdictions typically adopt agreed standards into national policy. The board’s warning arrives ahead of the G20 finance ministers and central bank governors meeting scheduled for mid-October.
Why it matters
Stablecoins are increasingly used to move capital in and out of the broader crypto ecosystem and could eventually support faster, cheaper cross-border payments. Without clear, harmonised rules and contingency measures, a failure in one part of the network could ripple through traditional financial markets, triggering broader liquidity strains. The FSB’s call for coordinated oversight aims to close regulatory gaps before a potential crisis unfolds.
