At the start of 2025, the stablecoin market was worth roughly $206 billion. Today it stands at $306 billion. Through all of that growth, nobody has watched these tokens go through a real collapse. According to the Financial Stability Board, the G20’s financial watchdog, that is exactly the problem.
A new FSB report says global stablecoins have never been tested by severe stress or insolvency. The watchdog warned that a crisis could reveal gaps in cross-border financial rules. It urged regulators to share more information with each other across borders, to step up their monitoring and to prepare for a stablecoin running into trouble or failing outright.
Rules are moving at different speeds
Stablecoins are crypto tokens whose value is tied to a fiat currency, and most of the market’s value is in tokens pegged to the U.S. dollar. They are designed to move freely between countries. The rules that govern them do not cross borders.
“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 sent with the report.
Because national frameworks are developing unevenly, the report said, it is unclear how holders would recover their money if an issuer collapsed.
Multi-issuer structures carry the most risk
The report points to multi-issuer setups as a particular concern. Under these arrangements, affiliated companies issue the same stablecoin and share liability for it, while keeping their reserve assets in different jurisdictions.
When holders can redeem with any issuer in the group, demand could pile up at one entity while the reserves it needs are held somewhere else. The FSB warned that shifting those reserves could get harder during a crisis. Legal claims could also become murky if an issuer failed, because it may not be obvious which country’s insolvency rules apply.
A 24/7 token backed by a 9-to-5 market
Timing creates another mismatch. Stablecoins trade around the clock, but the markets for the assets that back them keep fixed hours. The report said that during a run, a token could lose its peg if redemptions can’t keep up with selling.
The FSB did note one possible counterweight: deep, liquid secondary markets could help bring a token back toward its peg through arbitrage.
If that fails, the damage may spread beyond crypto. The report said forced sales of reserves and withdrawals of bank deposits could carry the shock into traditional financial markets as investors rush to raise liquidity.
Regulators can’t see who holds what
Poor data is a further weak spot. Because crypto transactions are pseudonymous, it can be hard to tell where holders are based and which jurisdiction covers them. That makes the planning the FSB is asking for more difficult.
Payments upside, with conditions
The FSB isn’t dismissing stablecoins. Today, much of their value is mainly used to move money into and out of crypto investments. Still, the report said the tokens could eventually make payments, including cross-border ones, faster and cheaper.
The recommendations are unlikely to force anyone to act. They are not legally binding, although FSB members generally commit to applying agreed standards in their home countries.
Bailey, who is also governor of the Bank of England, has warned in the past that international stablecoin rulemaking had stalled. The report’s timing makes those warnings carry more weight. It arrives just days before G20 finance ministers and central bank governors meet on Oct. 15, which will put the people who could act on it in the same room.