Global stablecoins have not been tested in a severe stress or in an insolvency, and neither have the national frameworks around them. One supervisor, on its own, may be unable to judge the cross-border vulnerabilities in full, or to deal with them. The warning is in a note from the Financial Stability Board.
What the FSB counts as global
For the FSB, a global stablecoin reaches users in more than one country and could grow important enough to affect financial stability in one or more of them, as a way to pay, as a store of value, or via links to other markets. The firms behind it, across sectors, form a global stablecoin arrangement, and more than one national authority may oversee them.
Around the middle of 2026 the combined value was about $300 billion, roughly flat on the year before. Coins tied to the US dollar were 99 percent of that value. The note builds on the FSB’s 2023 high-level recommendations on rules, supervision and oversight for these arrangements, and on a 2025 peer review of how far countries had applied them. The FSB’s work is not binding and creates no legal rights or obligations.
All-night trading, reserves that stay put
Today the coins mostly provide liquidity inside crypto markets. In some emerging and developing economies they may also hold value and may widen access to finance.
Unlike a bank, which knows its depositors, an issuer may not know who holds its coins, where they live or where a rush to redeem will land, because the tokens are pseudonymous and change hands around the clock. Part of what it owes may be invisible to it. That same reach is also part of what makes the coins potentially useful.
Reserves and legal protections, meanwhile, may stay at least partly anchored in particular countries, and redemption into ordinary currency follows market hours and, increasingly, supervisory rules. In a stress, round-the-clock trading could speed up selling and pressure the peg if redemptions cannot keep up, though deep, liquid markets might also help pull prices back. A run could potentially spill into ordinary finance through forced reserve sales, bank withdrawals, payments that rely on the coin, and currency markets.
Sister issuers, separate reserves
In some groups, several affiliated firms share the duty to redeem a single coin but each keeps its own reserves. Because holders might redeem with any of them, requests could pile onto one firm, and the reserve transfers and market trading meant to rebalance those flows may break down in a stress. If some holders cannot be located, it may be unclear who owes what.
Cross-border structure can magnify liquidity mismatches, run risk and operational fragility. Insolvency would leave separate legal and operational questions. Reserve quality and the supervisory regime remain central. Poorer or harder-to-sell reserves, where the 2023 recommendations are not in practice, can make this worse. Which country’s insolvency rules apply may be hard to say. Emerging and developing economies can also face a shift out of the local currency, deposits leaving banks, and a harder job with money that crosses the border, so a stablecoin could become systemic there at a lower level of use.
Rulebooks that do not meet
In many countries it is still unclear, or not written down, how one state’s rules meet another’s, including for coins issued abroad. The way national rules interact has helped produce complicated cross-border structures and openings for regulatory arbitrage. Some issuers choose places with light rules, or with none.
An arrangement may run through several companies and several regimes. That can complicate oversight, crisis handling, accountability and cooperation. A letter from FSB chair Andrew Bailey adds that the tools for doing this across borders remain immature or, in places, not yet developed.
The note states it this way:
“Global stablecoins and national regulatory frameworks remain untested in severe stress and insolvency.”
Plenty of data, hard to use
The analysis backs a watch on how deep secondary markets are, how readily they trade, how they are built, and which countries account for holdings, redemptions and reserves, especially if several issuers share a coin. Three further lines on the 2023 recommendations may still deserve time: closer monitoring of cross-border weak points, help so authorities share information and cooperate, and a collection of plans for distress or failure.
The FSB says this is not a full assessment of the data supervisors need. Some limits are structural: public blockchains are pseudonymous, and that is likely to persist unless crypto changes significantly. Authorities lean mostly on private data compilers, which widens access but raises comparability and credibility risks, and tying activity to a country or a use is often impossible. Data availability has improved markedly, though, and if that continues some gaps could ease.
Before the G20 meets
Bailey, who is also Governor of the Bank of England, set out the FSB’s work in a letter dated 8 October and published by the FSB on 12 October, alongside the note. G20 finance ministers and central bank governors are due to meet on 15 October.
“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,” he wrote.
He added that the coins still come up often in talks on fraud and related financial crime, especially when run from lightly regulated places, and that this can affect financial stability. He wants new rules to keep financial stability as a clear aim and to function together worldwide. The note should help, he wrote.
“Facilitating greater consistency of outcomes in line with the FSB’s 2023 recommendations is a necessary step to supporting the objective of enabling the safe use of stablecoins across borders.”
The letter also introduces other papers the US G20 presidency requested: an AI toolkit, a review of temporary last-resort public funding for banks in resolution, a supervision consultation that will be finalised in 2027, and a look at how the FSB writes policy.
This article is not investment advice.
