Global stablecoins could transmit liquidity stress across borders faster than existing regulatory and monitoring systems can track it, the Financial Stability Board said in a report prepared for Group of Twenty finance ministers and central bank governors.
The report, dated October 12, examines how globally used stablecoins could propagate financial instability through reserve assets, banking relationships, foreign-exchange markets and payment dependencies. It does not impose new rules. Instead, it identifies monitoring priorities and areas where regulators may need more cross-border cooperation, information sharing and planning for the distress or failure of a stablecoin arrangement.
For payment providers, the central issue is not simply whether a token maintains its peg in normal markets. The FSB’s analysis focuses on whether redemption rights, reserves, operating entities and supervisory responsibilities remain aligned when tokens move continuously across jurisdictions.
A 24/7 token can depend on slower financial infrastructure
The FSB describes a structural mismatch between globally transferable tokens and the institutions supporting them. Stablecoins can circulate around the clock on secondary markets, while reserve assets and redemption processes remain tied to particular legal regimes, market hours and settlement practices.
In a stress event, token holders could sell or seek redemption more quickly than an issuer can mobilize reserves. The report says a run could then reach traditional finance through reserve-asset fire sales and withdrawals of bank deposits used to fund redemptions. It could also affect foreign-exchange markets or real-economy payment and settlement if businesses have become dependent on the stablecoin.
Liquid secondary markets can cut both ways. Arbitrage may help move a token back toward its peg, but round-the-clock trading can also accelerate a sell-off while reserve markets are closed or redemption capacity is constrained.
The FSB estimates the stablecoin market at about $300 billion as of mid-2026, essentially unchanged from a year earlier, with dollar-pegged tokens representing 99% of market value. It says stablecoins are still used predominantly as liquidity for entering, exiting and trading in crypto markets, although they may support faster and lower-cost domestic and cross-border transactions at greater scale in the future.
Multi-issuer structures add a reserve-location problem
The report gives particular attention to multi-issuer arrangements, where affiliated entities share responsibility for one stablecoin but hold separate reserves. If holders can redeem with any issuer, demand could concentrate at one entity even when the corresponding reserves sit elsewhere.
That model depends on cross-border reserve rebalancing, market access, information flows and coordination. Those mechanisms may become less reliable during market stress. The FSB also warns that uncertainty about a holder’s location can make it harder to determine which issuer bears the liability and which legal claim applies in an insolvency.
This creates an operational question for payment companies integrating a global stablecoin: accepting one fungible token does not necessarily mean the redemption path, legal protections or reserve access are uniform across every market. Providers may need to understand which entity stands behind the token in each jurisdiction and how value would be returned during disruption, not only during routine settlement.
Regulatory fragmentation complicates crisis planning
The FSB says treatment of foreign-issued stablecoins remains uncertain or undefined in many jurisdictions. Different implementation of its 2023 recommendations has also enabled complex cross-border structures and opportunities for regulatory arbitrage.
The report does not prescribe a single regulatory model. It says domestic mandates and legal frameworks differ, but their interaction can complicate oversight, accountability, crisis management and cooperation. Global stablecoins and the national frameworks governing them have not yet been tested in severe stress or insolvency, the FSB notes.
Emerging markets may face financial-stability effects at a lower level of adoption because stablecoins can contribute to currency substitution, bank disintermediation and challenges in managing capital flows.
Abundant blockchain data still leaves major blind spots
Public blockchains produce extensive transaction data, but the FSB says pseudonymity often prevents authorities from reliably assigning activity to specific countries or uses. That limits their ability to measure geographic concentrations, cross-border flows and the location of redemption demand.
Regulators also rely heavily on private data compilers whose proprietary methods may differ in accuracy, transparency and coverage. Divergent heuristics can produce inconsistent estimates and make comparisons across providers difficult.
The FSB outlines three possible next steps: develop financial-stability metrics and identify missing data; make better use of existing information through international expertise and coordination; and explore industry practices that could improve the quality and comparability of onchain and offchain data.
For the payments industry, the report shifts attention from transaction throughput to resilience. A stablecoin rail may move value continuously, but its safety ultimately depends on reserve liquidity, redemption capacity, legal clarity and coordination among the institutions and regulators behind it.