The Financial Stability Board has warned that stablecoins could expose major gaps in international financial rules if a severe market crisis or issuer failure triggers a rush for redemptions. The global financial watchdog is calling for stronger information sharing, monitoring and contingency planning between national authorities.
According to CoinDesk, the FSB said global stablecoins have not yet been tested through severe market stress or insolvency. The concern is heightened by the fact that national regulatory frameworks are advancing at different speeds, leaving uncertainty over how holders would recover funds if an issuer failed.
Stablecoins are crypto tokens designed to maintain a value linked to a fiat currency, most commonly the U.S. dollar. Their market capitalization stood at about $206 billion at the beginning of 2025 and has since expanded to $306 billion, according to the report. Although much of their current use involves moving funds into and out of crypto investments, the FSB said stablecoins could eventually support faster and cheaper payments, including international transfers.
Why cross-border structures pose a challenge
FSB Chair Andrew Bailey said global stablecoin arrangements are cross-border by nature, while national rules and cooperation mechanisms are still developing. Bailey is also governor of the Bank of England.
The report identified multi-issuer arrangements as a particular area of risk. In these structures, affiliated companies in different jurisdictions may issue the same stablecoin, share responsibility for it and hold reserve assets separately.
That arrangement could become difficult to manage during a crisis. Holders may be able to redeem their tokens through any issuer in the group, concentrating redemption requests on one company even when the assets needed to meet those requests are held in another country. Moving reserves across borders could be more difficult during market stress.
The FSB also warned that an issuer’s failure could create uncertainty over which country’s insolvency rules should apply and how legal claims by token holders would be handled. The issue is not limited to the issuer itself: a disruption at one entity could affect the wider arrangement if its obligations and reserves are spread across multiple legal systems.
Trading around the clock adds pressure
Stablecoins can trade continuously, while the markets for the assets backing them operate during set hours. The FSB said this mismatch could become important during a run on a token. If holders seek redemption faster than the backing assets can be sold or transferred, the stablecoin could lose its intended peg.
The report also noted that deep and liquid secondary markets may help restore a token’s value toward its peg through arbitrage. In general terms, arbitrage involves market participants buying an asset when it trades below its intended value and selling it where a price difference exists. The FSB nevertheless highlighted possible spillovers if reserve assets are sold under pressure or banks face withdrawals of deposits linked to stablecoin activity.
Those flows could transmit stress into traditional financial markets as investors and institutions compete for liquidity. Pseudonymous crypto transactions create an additional monitoring problem because authorities may find it difficult to determine where holders are located and which jurisdiction has responsibility.
FSB calls for coordinated preparation
The watchdog recommended more cross-border information sharing, closer monitoring and advance planning for stablecoin distress or failure. Its recommendations are not legally binding, although FSB members generally commit to implementing agreed standards through their national systems.
The report arrives shortly before the G20 finance ministers and central bank governors are due to meet on Oct. 15. It also follows previous warnings from Bailey that international work on stablecoin rules had stalled.
The FSB’s central concern is that stablecoins have grown substantially before authorities have had the opportunity to observe how the market behaves under extreme conditions. Differences in national regulation, the geographic distribution of reserves and issuers, continuous trading and limited visibility into ownership could all complicate a coordinated response.
Moneyiar market picture
Moneyiar data at 09:34 on Oct. 13, 2026, showed Cronos at $0.0594796943, down 3.16% over 24 hours and 12.26% over seven days. Stable was priced at $0.0262726725, down 1.81% in 24 hours and 6.47% over seven days.
Compound stood at $23.4684723143 at 09:33, down 6.62% over 24 hours and 3.57% over seven days. Four was priced at $0.2781370708 at 09:34, down 3.47% over 24 hours and up 0.29% over seven days. These figures cover selected crypto assets and do not measure the $306 billion stablecoin market capitalization cited in the FSB report.
