The Financial Stability Board warns of cross-border risks from stablecoins, calling for the establishment of crisis response mechanisms.

The Financial Stability Board (FSB) warned in its latest report that global stablecoins have not yet withstood severe market stress or bankruptcy scenarios, as national regulatory frameworks advance at uneven paces and cross-border collaboration remains in its early stages. The FSB called for strengthened cross-border information sharing, risk monitoring, and advance contingency plans for when stablecoin issuers face distress or collapse. The FSB specifically noted that multi-issuer structures could amplify cross-border risks: affiliated companies issue the same stablecoin across different jurisdictions and hold separate reserve assets, but users may redeem from any issuer in the group. If redemption demand concentrates on one issuer while reserve assets are held in other regions, fund transfers during a crisis could be blocked, and creditor claims plus applicable bankruptcy laws could be hard to determine if an issuer goes bankrupt. Additionally, stablecoins’ 24/7 trading does not align with the trading hours of their underlying reserve assets, which may lead to redemption pressure failing to be met via timely asset sales and trigger depegging. Forced sales of reserve assets and concentrated bank deposit withdrawals could also transmit shocks to traditional financial markets. The FSB also pointed out that the anonymity of crypto transactions may make it harder to identify holders’ locations and their applicable regulatory jurisdictions. Data shows that the total market capitalization of stablecoins has risen from roughly $206 billion at the start of 2025 to around $306 billion, with the majority being dollar-pegged stablecoins. The FSB’s recommendations are not legally binding, but its members typically commit to implementing the relevant standards domestically. The report is released ahead of the G20 finance ministers and central bank governors’ meeting scheduled for October 15.