The Financial Stability Board (FSB) warned that stablecoins could face redemption crises if, during market stress, reserves become inaccessible across borders.
In an Oct. 12 report, the global financial watchdog said stablecoin issuers operating through affiliated entities in different countries could struggle to meet concentrated withdrawal demands when their reserve assets are held elsewhere.
The warning comes ahead of an Oct. 15 meeting of G20 finance ministers and central bank governors, as regulators confront growing risks from a stablecoin market valued at approximately $300 billion in mid-2026, with 99% of its value pegged to the US dollar.
FSB Chair Andrew Bailey said international regulatory coordination remains underdeveloped, leaving authorities without mature arrangements for managing cross-border stablecoin failures.
The FSB identified particular vulnerabilities in stablecoins issued by multiple affiliated companies that share liability for the same token while maintaining separate reserves.
Under such arrangements, holders may be able to redeem their tokens through any participating issuer, regardless of where the stablecoins were originally issued.
That flexibility can create liquidity mismatches when redemption demand concentrates in one jurisdiction while much of the collateral backing the tokens remains in another.
Moving reserves between entities could resolve the imbalance under normal conditions. However, banking restrictions, settlement delays and differences in national regulations could complicate those transfers during a market panic.
Digital tokens can move across borders and trade around the clock, while the Treasury securities, bank deposits and other traditional assets backing them remain subject to local financial-market operating hours and settlement arrangements.
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