Global watchdog warns G20 that cross-border stablecoins are untested in a crisis

Stablecoins used across borders have never been tested in a severe crisis, and nor have the national rules written for them. That is the warning the Financial Stability Board published on 12 October for the G20's finance ministers and central bank governors, who meet on 15 October. The board brings together the authorities responsible for financial stability in 24 countries and jurisdictions. Stablecoins are crypto tokens meant to hold a steady value, usually one dollar, backed by reserves such as cash and short-term government debt. The board's nine-page note is not a rule. It describes risks and proposes further work, and the board cannot make rules of its own.

The worry starts with a difference from banks. A bank knows its depositors and can see its whole balance sheet when they ask for money back. A stablecoin issuer may not know who holds its tokens or where they live, because the tokens trade around the clock between pseudonymous wallets. Yet the reserves, and holders' legal rights, stay tied to particular countries, and the markets where reserves are sold keep set opening hours. In a rush to sell, the board says, round-the-clock trading could push a token below its dollar faster than redemptions can be paid. Deep trading markets could also help pull it back. If a run did take hold, it could spread through forced sales of reserve assets, withdrawals of bank deposits and foreign exchange markets where stablecoins are used.

The note singles out stablecoins issued jointly by affiliated companies in several countries, each holding its own reserves. If a holder can cash out with any company in the group, demand could pile up at one of them while the money sits with another. A holder of a token minted by an American arm might, for example, ask a European arm to pay. Moving reserves between countries to meet that demand may get harder in a crisis. If an issuer failed, it could be unclear whose bankruptcy law applies and which company owes whom. The note names no stablecoin or issuer. Crypto Briefing reported that the board named Circle's USDC and Paxos's Global Dollar as examples, but neither the note nor the chair's letter mentions any company or token.

The board also points to gaps between national regimes, including how countries treat stablecoins issued abroad. It says some issuers have chosen to base themselves in lightly regulated or unregulated places. Poorer and emerging economies face extra risks: people may swap the local currency for dollar tokens, banks may lose deposits, and controls on money leaving the country become harder to enforce. In such places, the note says, stablecoins could become a threat to the system at lower levels of use. Andrew Bailey, the board's chair, is also Governor of the Bank of England. In a covering letter he wrote that national rules are taking shape "at different speeds" and that cooperation across borders "is still in its infancy".

The note puts the stablecoin market at about $300bn in mid-2026, essentially unchanged from a year earlier, with 99% of it by value tied to the dollar. CoinDesk, using figures that do not come from the note, described growth to $306bn from about $206bn at the start of 2025. The board says regulators rely mostly on private data firms whose methods differ and are often undisclosed. Because transactions are pseudonymous, it is often impossible to tell which country a holding belongs to.

The ministers asked for this work. At their meeting in Asheville, North Carolina, on 31 August and 1 September, they said they looked forward to the board's summary of its findings on cross-border stablecoins and stablecoin data. Bailey's letter to that meeting did not mention digital assets; this time his letter gives global stablecoins a section of its own. What the board proposes next is more work, not new rules. It wants a closer watch on risks that cross borders and more sharing of information between national authorities. It also wants to learn how stablecoin groups plan for distress or failure. So far only the crypto trade press has reported the note.