Stablecoins have grown from roughly $206 billion in market capitalization at the start of 2025 to $306 billion now. In all that time, nobody has seen how they behave in a real collapse. The Financial Stability Board, the G20’s financial watchdog, says that’s the problem.
In a new report, the FSB said global stablecoins haven’t been tested under severe stress or insolvency. It warned that a crisis could expose gaps in cross-border financial rules, and it called on regulators to share more information across borders, step up monitoring and plan for stablecoin distress or failure.
Rules are moving at different speeds
Stablecoins are crypto tokens whose value is pegged to a fiat currency, and most of the market’s value sits in tokens pegged to the U.S. dollar. They move across borders by design. The rules covering them stop at each border.
“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,” Andrew Bailey, chair of the FSB, wrote in a letter that came with the report.
Because national frameworks are developing unevenly, the report said, it isn’t clear how holders would get their money back if an issuer went under.
Multi-issuer structures carry the most risk
The report singles out multi-issuer setups. In these, affiliated companies issue the same stablecoin and share liability for it, but keep their reserve assets in different jurisdictions.
If holders can redeem with any issuer in the group, demand could pile up on one entity while the assets it needs sit somewhere else. The FSB warned that moving those reserves could get harder in a crisis. If an issuer failed, legal claims could also get murky, because it may be hard to tell which country’s insolvency rules apply.
A 24/7 token backed by a 9-to-5 market
There’s also a timing mismatch. Stablecoins trade around the clock, but the markets for the assets backing them keep set hours. In a run, if redemptions can’t keep up with selling, a token may lose its peg, the report said.
The FSB did point to a possible offset. Deep, liquid secondary markets could help pull a token back toward its peg through arbitrage.
If that doesn’t work, the damage may not stay inside crypto. The report said forced reserve sales and bank deposit withdrawals could carry the shock into traditional financial markets as investors scramble for liquidity.
Regulators can’t see who holds what
Weak data is another gap. Crypto transactions are pseudonymous, so it can be hard to tell where holders are based and which jurisdiction applies to them. That makes the planning the FSB wants harder to do.
Payments upside, with conditions
The FSB isn’t writing stablecoins off. Much of their value today mainly moves money in and out of crypto investments, but the report said the coins could eventually make payments faster and cheaper, including across borders.
Don’t expect the recommendations to force anyone’s hand. They aren’t legally binding, though FSB members tend to commit to putting agreed standards into practice at home.
Bailey, who is also governor of the Bank of England, has warned before that international stablecoin rulemaking had stalled. The timing of this report gives those warnings more weight. It lands just days before G20 finance ministers and central bank governors meet on Oct. 15, where the people who could act on it will be in the same room.
