Stablecoin rules are 'untested in severe stress,' the G20's financial watchdog warns, with 99% of a $300 billion market riding on the dollar

The Financial Stability Board, the G20's financial watchdog, has warned that global stablecoins, and the national rules written for them, have not been tested by a severe run or by an issuer's insolvency. Its note on cross-border risks was published on Monday, October 12, three days before G20 finance ministers and central bank governors meet in Bangkok.

The FSB puts the market at around $300 billion as of mid-2026, with 99% of it by value pegged to the US dollar, and says stablecoins are still used mainly inside crypto markets.

Its concern is what happens across borders. An issuer may not know who holds its tokens or where demand to cash out will come from. Tokens change hands around the clock, while redeeming them and managing reserves depend on the operating hours of traditional markets. Where affiliated companies issue the same coin, holders could all try to redeem at one of them while reserves sit elsewhere. If an issuer failed, it may be unclear which country's insolvency law applies. A run could also spill into traditional markets through forced sales of reserve assets and withdrawals of bank deposits.

In a letter to the G20, FSB chair Andrew Bailey, who is also governor of the Bank of England, wrote that cooperation between countries on stablecoins is still at an early stage.

The FSB plans closer monitoring of cross-border risks, more information-sharing between regulators and work on planning for a stablecoin's distress or failure. Its decisions are not legally binding on members.