The Financial Stability Board has warned G20 members that stablecoins move globally while supervision remains fragmented by jurisdiction. In a note dated October 12, the board said that reserve assets, token trading and redemption obligations can sit in different places at the same time, leaving no single authority with a complete picture when stress emerges.

The FSB estimated the stablecoin market at about $300 billion in mid-2026, with dollar-pegged tokens making up 99% of the total by value. Rather than proposing a new binding licensing regime, the board set out a monitoring agenda focused on reserve locations, holder geography, redemption patterns and the limits of both onchain and offchain data.

Why cross-border stablecoins create blind spots

The note defines a global stablecoin by its actual or potential reach across jurisdictions and by its potential systemic importance in one or more of them. A token may circulate around the clock across borders and blockchains, while the legal promise to redeem it and the assets backing that promise remain tied to specific entities and legal systems.

According to the FSB, that separation matters most when a token trades below its peg and holders try to redeem. An issuer may not know where token holders are located or which affiliate will face the first cash demand. Even when reserve backing looks adequate in aggregate, supervisors may still lack visibility into where pressure will appear and which legal claim applies.

Multi-issuer structures can shift redemption pressure

The report gives particular attention to arrangements in which affiliated issuers share liability for one token but maintain separate reserve pools. In normal market conditions, that structure can support international use because holders may be able to redeem through more than one entity. Under stress, however, demand could concentrate at a single affiliate even if reserves are held elsewhere in the group.

The FSB said secondary market trading and cross-border reserve rebalancing might ease those mismatches, but it also cautioned that such mechanisms may fail in stressed conditions. If tokens are held through intermediaries and it is unclear which affiliate ultimately owes the holder, insolvency or resolution questions become harder to answer.

Potential spillovers extend beyond crypto trading

The board said stablecoins are still used mainly inside crypto markets, where they act as trading and settlement liquidity. It also noted their use as stores of value in some emerging economies and said broader payment use could develop over time.

That matters because stress could travel through several channels: sales of reserve assets, withdrawals of bank deposits to fund redemptions, disruption to payment or settlement networks that rely on stablecoins, and foreign exchange markets used in cross-border transfers. The FSB did not say such a chain has already occurred at system-wide scale. Its point was that adoption patterns and local financial conditions will determine whether a problem remains contained or spreads into banks, markets or payments infrastructure.

Blockchain data does not answer the geography question

Public blockchains provide transaction records, but the FSB said those records usually cannot reliably show the country behind each address or the economic purpose of a transfer. A movement onchain may reflect a remittance, exchange collateral, a user shifting funds between personal wallets or another form of activity. Centralized platforms can also net customer trades internally, leaving no matching onchain record for every transaction.

The board split the data problem into structural gaps and coordination gaps. Pseudonymity and smart contract design mean some information may be inherently difficult to recover, while other data may exist with issuers, exchanges, custodians or analytics firms but not be shared in a comparable format. Private data providers already supply much of the information authorities use, yet differing methodologies can produce divergent numbers that are hard to compare without knowing how they were compiled.

No new global rule, but pressure for better reporting

The FSB said existing national treatment of foreign-issued stablecoins remains uneven, echoing findings from its 2025 peer review. It did not propose a single global regulator or a binding new international licensing system. Instead, it pointed to information-sharing arrangements, comparable reporting and crisis planning as ways to help domestic authorities build a less fragmented view.

As a next step, the board suggested monitoring the depth and liquidity of secondary markets as well as the geographic distribution of holdings, redemptions and reserve assets. It framed the note as an assessment of information gaps, not a forecast of an imminent run or a new set of hard prudential rules. The immediate question for supervisors and issuers is which of that missing information can actually be delivered, and which parts may remain structurally unobservable.

Source: crypto.news