The FSB warns of rising risks from stablecoins, highlighting potential threats to liquidity and economic stability, especially in developing nations.
The Financial Stability Board (FSB), part of the G20, has issued a warning regarding the escalating risks associated with stablecoins, despite the relatively minor impact of the cryptocurrency market on the broader financial system in 2025.
In its recent Annual Report, the FSB noted that while cryptocurrencies demonstrated notable volatility, their overall influence on global finance remained limited, even as ties to traditional markets grew stronger. Conversely, both the market capitalization and transaction volume of stablecoins saw an uptick, although their practical applications in areas like payments remained minimal.
Identified Risks
The FSB outlined several vulnerabilities linked to stablecoins that necessitate close monitoring:
- Risks related to liquidity and reserve stability;
- Operational risks tied to their infrastructure;
- Increased connections with the conventional financial system.
Particular concern was raised regarding global tokens that operate across various jurisdictions, as managing reserves in multiple countries can introduce complexities and amplify systemic risks.
Impact on Developing Economies
Foreign currency-denominated stablecoins are noted to pose distinct challenges for emerging economies, which could face consequences such as:
- Displacement of local currencies and payment systems;
- Reduced effectiveness of monetary policies;
- Strain on fiscal resources;
- Bypassing of capital control measures.
Regulation and Oversight Issues
The FSB emphasized the significant regulatory gaps and inconsistencies surrounding crypto assets and stablecoins. As different nations adopt varying regulatory approaches, these discrepancies heighten risks to financial stability. A review in 2025 revealed that while many jurisdictions have advanced in regulating the crypto landscape, few have established comprehensive frameworks for global stablecoins.
This uneven regulatory implementation creates avenues for regulatory arbitrage and complicates the oversight of the international market. Additionally, the lack of effective coordination among countries results in fragmented cross-border interaction mechanisms.
Experts also pointed out the insufficient quality of data on the crypto market, as reliance on commercial sources and fragmented information limits a thorough understanding of associated risks and vulnerabilities. Notably, the SEC had previously excluded stablecoins from the securities category in its updated token taxonomy in March.
