Karla Barker 
The Financial Stability Board says stablecoins remain untested in a severe market crisis and may expose gaps in cross-border financial rules. In a new report, the G20 watchdog called for more information sharing, monitoring, and planning for stablecoin distress or failure. It also said national rules are moving at different speeds, which makes it harder to know how holders would recover funds if an issuer collapsed.
The stablecoin market began 2025 at about $206 billion in capitalization and has since grown to $306 billion. Most of that value sits in tokens pegged to the U.S. dollar. Much of the current use is tied to moving in and out of crypto trades. Still, the FSB said stablecoins could eventually support faster and cheaper payments, including across borders.
Why Regulators Are Worried
Global stablecoin arrangements are cross-border by nature. But regulation is not. FSB Chair Andrew Bailey wrote in an accompanying letter that cross-border cooperation in this area is still in its infancy. That gap matters because a stablecoin issuer may operate in one country, hold reserves in another, and serve holders in many more.
The FSB is especially concerned about multi-issuer structures. Under these setups, affiliated companies can issue the same stablecoin and share liability for it while keeping reserve assets in separate jurisdictions. If holders can redeem with any issuer in the group, demand could concentrate on one entity while the assets needed to meet redemptions sit somewhere else. Moving those reserves during a crisis may be difficult. Legal claims could also become unclear if an issuer fails, because it may not be obvious which country’s insolvency rules apply.
Runs, Pegs, and Market Hours
Stablecoins trade around the clock. The markets for assets backing them do not. That mismatch could matter during a run. If redemptions cannot keep pace with selling, a token may lose its peg. The FSB added that deep, liquid secondary markets could help pull a token back toward its peg through arbitrage.
A bigger worry is spillover. Forced reserve sales and bank deposit withdrawals could spread stress into traditional financial markets as investors rush for liquidity. The FSB also flagged weak data. Because crypto transactions can be pseudonymous, regulators may struggle to tell where holders are based and which jurisdiction should apply.
The report does not claim a crisis is imminent. It argues that planning should start now. Cross-border information sharing and clearer recovery plans could reduce confusion if a large stablecoin faces distress. For now, the rules remain uneven, and the market keeps growing.