The Financial Stability Board (FSB) has warned that global stablecoins and the national rules governing them remain untested in a severe market crisis, and has called on jurisdictions to deepen cross-border information sharing, monitoring and contingency planning for distress or failure of fiat-pegged tokens.

In a report published ahead of the G20 finance ministers' and central bank governors' meeting on Oct. 15, the G20's financial watchdog said stablecoins have not been tested under severe stress or insolvency conditions, while national regulatory frameworks are developing at different speeds. That mismatch raises unresolved questions about how holders would recover their funds if an issuer failed.

"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," FSB Chair Andrew Bailey wrote in an accompanying letter. Bailey also serves as governor of the Bank of England and has previously warned that international stablecoin rulemaking has stalled.

How big is the market at stake?

The stablecoin market started 2025 at roughly $206 billion in capitalization and has grown to $306 billion, according to the report. Most of that value sits in tokens pegged to the U.S. dollar. While much of it is currently used to move in and out of crypto investments, the FSB noted the coins could eventually enable faster, cheaper payments, including across borders.

Why do multi-issuer structures worry the FSB?

The report singles out so-called multi-issuer models as higher-risk. In these arrangements, affiliated companies issue the same stablecoin and share liability for it while holding reserve assets in separate jurisdictions.

The operational consequences the FSB laid out include:

• Redemption demand could pile up on a single issuer while the assets needed to meet it sit in another entity, and moving those reserves mid-crisis may prove difficult.
• If an issuer fails, it may be hard to determine which country's insolvency rules apply, leaving legal claims unclear.
• Stablecoins trade around the clock, but markets for the reserve assets backing them have set operating hours. If redemptions cannot keep pace with selling during a run, a token may lose its peg.

The FSB acknowledged a partial mitigant: deep, liquid secondary markets could pull a token back toward its peg through arbitrage.

The watchdog also warned of transmission channels into traditional finance. Forced reserve sales and bank deposit withdrawals could spread a shock into conventional markets as investors scramble for liquidity.

What does the report ask regulators to do?

The FSB called for more cross-border information sharing, monitoring and planning for stablecoin distress or failure. Its recommendations are not legally binding, but members tend to commit to putting agreed standards into practice nationally.

Weak data compounds the problem. The pseudonymous nature of cryptocurrency transactions makes it difficult to establish where holders are based and which jurisdiction applies, limiting authorities' ability to coordinate a response.

The report lands days before the G20 finance ministers and central bank governors convene on Oct. 15, where stablecoin supervision is expected to feature in the agenda as jurisdictions work to align national frameworks with the FSB's standards.