The board's note to G20 finance ministers sets out four channels through which a stablecoin run could reach the rest of the financial system. It also warns that in multi-issuer arrangements, redemption demand could concentrate on a single entity while the reserves sit somewhere else.
The Financial Stability Board told G20 finance ministers and central bank governors on Monday that the arrangements for supervising global stablecoins across borders, and for handling one in a crisis, are either immature or do not exist yet. The warning came in a letter from FSB Chair Andrew Bailey, dated October 8, published alongside five reports the body is delivering to the group. The FSB said the letter went out ahead of the ministers' meeting on October 15, which its publications listing places in Bangkok.
Bailey wrote that cross-border cooperation on global stablecoins "is still in its infancy," and that mechanisms for "cross-border oversight, crisis management, accountability and cooperation in stress or insolvency" remain "immature or are not yet developed." The FSB coordinates standards rather than enforcing them, and the accompanying note repeats that the body's activities "shall not be binding or give rise to any legal rights or obligations."
That note, on cross-border vulnerabilities and financial stability monitoring of global stablecoin arrangements, sets out four channels through which a run on a stablecoin could reach the rest of the financial system. An issuer selling reserve assets to meet redemptions could push prices down in those markets. Funding redemptions could pull deposits out of banks. Businesses that use a stablecoin for payment and settlement would lose a working payment rail. And where the tokens are used for cross-border transactions, the stress would reach foreign exchange markets.
None of this has been tried. "Global stablecoins and national regulatory frameworks remain untested in severe stress and insolvency," the note says. It adds that in a failure it may be hard to establish which national insolvency regime applies, a question that matters because issuers often sit inside complex cross-border corporate structures and some are based in jurisdictions that regulate them lightly or not at all.
The most specific vulnerability the note identifies concerns multi-issuer stablecoins, where affiliated issuers share liability for a single token but hold separate pools of reserves. Keeping reserves where the redemptions are depends on moving them across borders and on secondary-market trading, and the note says that this depends in turn on reserve mobility, market access, information flows and coordination, all of which may break down under stress. If holders can redeem with any issuer regardless of where their tokens were issued, the note warns, "redemption demand could concentrate on a single entity in the group."
Two features separate the problem from a bank run. Issuers may not know who holds their liabilities or where redemption demand will arise, because the tokens change hands on public blockchains rather than on an issuer's books. And they trade continuously, so stress can spread faster than in markets that close, though the note allows that deep and liquid secondary markets can also support the arbitrage that holds a peg.
The FSB puts the stablecoin market at around $300 billion as of mid-2026, which it describes as essentially unchanged from a year earlier, and says about 99 percent of that value is pegged to the US dollar. Those characteristics, the note says, "may limit the ability of a single jurisdiction alone" to assess or address cross-border vulnerabilities.
Emerging market and developing economies carry additional risks in the FSB's reading, including currency substitution, banks losing deposits, and complications for managing capital flows. A stablecoin could become systemically important in those economies at a lower level of use than it would elsewhere.
A large part of the note is about what supervisors currently cannot see. Authorities mostly rely on private data providers, which the FSB says improves access but introduces comparability and credibility risks, because the providers' proprietary methods vary in accuracy and transparency. Linking on-chain activity to a particular use or location is harder still: transactions are pseudonymous, and where attribution is possible it may not be verifiable. The FSB separates the constraints it expects to persist, chiefly pseudonymity, from the ones it treats as tractable, such as data that exists but is not disclosed and reporting methods that are not consistent between sources.
The metrics it wants authorities to watch follow from that. They are the depth, liquidity and structure of secondary markets, and the geographic distribution of holdings, redemptions and reserve assets, with the last of those mattering most in multi-issuer arrangements. The proposed next steps are to build a set of monitoring metrics and identify the gaps, make better use of data that already exists through cross-border information sharing, and work with industry on how on-chain and off-chain data are collected. The note calls itself "not a comprehensive assessment" of what monitoring would require.
The gap the FSB describes is already being tested. The European Securities and Markets Authority told national regulators last week that licensed platforms should stop offering services tied to stablecoins outside MiCA, an instruction that turns on how one bloc treats tokens issued elsewhere. Reserve quality, the note's other emphasis, was in view this month when Polkadot launched a native stablecoin backed entirely by Tether's USDT. And the G20's own record on this is thin: ministers committed to clearer rules for digital assets earlier this year in a chair's statement rather than a communique, because China declined to join the consensus.
What the FSB is delivering to Bangkok is a description of the gap rather than a plan to close it. Its stated next step is to agree on what to measure.
