InvestIndependently confirmed2 publishers2 min readPublished
FSB warns stablecoin issuers with reserves held in other countries could struggle to meet concentrated redemptions, raising run risk
The Financial Stability Board published an Oct. 12 report on cross-border stablecoin vulnerabilities ahead of the G20 finance ministers' Oct. 15 meeting. Reserves held in another country can leave issuers struggling to meet a run on a roughly $300 billion market, CryptoSlate reports; CryptoTimes says the report adds no new restriction on issuers.
The Investor · Invest desk
Of a roughly $300 billion stablecoin market, about $297 billion is pegged to the US dollar and about $3 billion is not dollar-pegged.
- Pegged to the US dollar, about, claim 18 $297 billion of $300 billion approximate 99% computed
Pegged to the US dollar, about The rest of the 300
- Not dollar-pegged, about, claim 19 $3 billion of $300 billion approximate 1% computed
Not dollar-pegged, about The rest of the 300
| Share | Part | Whole | Percent | Claim |
|---|---|---|---|---|
| Pegged to the US dollar, about | $297 billion approximate | $300 billion approximate | 99% (computed) | 18 |
| Not dollar-pegged, about | $3 billion approximate | $300 billion approximate | 1% (computed) | 19 |
What happened
- The FSB singled out stablecoins issued by several affiliated companies that share liability for one token but keep separate reserves, with holders free to redeem through any participating issuer.
- Per the FSB, delayed redemptions could push holders to sell at a discount on secondary markets, and a large run could reach banks if issuers liquidate reserves or withdraw deposits.
- Circle's redemption policy, updated in September, lets Circle France defer certain redemptions in a defined stress event if it and the US entity cannot finish rebalancing reserves.
- CryptoSlate reports Bailey said international coordination is underdeveloped, leaving authorities without mature arrangements for managing cross-border stablecoin failures.
Why it matters
- constraint In a failure, issuers may not know where their tokens sit, because pseudonymous transactions blur which entity owes which redemption, and national insolvency laws leave open which regulator steps in.
- decision Issuers sharing liability across entities must choose between positioning reserves where demand may concentrate and writing deferral rights into policy; deferral is the delay the FSB says drives discount sales.
- contradiction The G20 chair's Sept. 1 statement asked for "clear pathways" for digital-asset innovation, while the FSB's 2025 assessment found substantial gaps in countries' implementation of its stablecoin recommendations.
CryptoSlate's wording, that authorities lack mature arrangements for cross-border stablecoin failures, is weaker than saying no crisis procedures exist, and it is one publisher's paraphrase of Bailey [6]. The only words of his that CryptoTimes prints concern the general pace of change: "The pace of change in the financial system continues to accelerate," Bailey wrote [17]. CryptoTimes describes the stablecoin report as monitoring work on vulnerabilities, the data authorities need and information-sharing under the FSB's 2023 recommendations [3]. It does not mention crisis procedures, and neither summary says how much of the $300 billion is issued under shared-liability arrangements.
The composition of the market matters more than its size. With 99% of the value pegged to the dollar [5], a $300 billion market is about $297 billion of dollar-pegged tokens [18] and about $3 billion of everything else [19], so the strain the FSB describes comes from operating hours, settlement and entity-level rules. Tokens trade around the clock while the Treasuries and deposits behind them follow local market hours and settlement arrangements [9]. The transfer that fixes an imbalance between entities in calm conditions can be held up by banking restrictions, settlement delays and differences in national rules once a panic starts [8].
CryptoSlate is careful about Circle. Its provisions are contingency arrangements, not an existing liquidity failure, and they operate under jurisdictional redemption rules that differ from the FSB's unrestricted cross-issuer model [12]. We think the clause still shows the trade-off in one document. A right to defer redemptions while two entities finish rebalancing is a right to create the delay that the FSB says pushes holders into discount sales [10]. Circle's policy preserves holders' rights to redemption at par [11], so the test is whether secondary-market buyers believe that right during the deferral.
The headline risk is a run on fully reserved coins, or rather a run on one structure of them. We think the run described is a design risk of shared-liability, redeem-anywhere arrangements [7], and the exposed amount is whatever share of the $300 billion uses them. If that share turns out to be most of the market, the view fails. The counter-thesis is the hours mismatch [9], which does not depend on how many affiliated entities an issuer has.
Two other outcomes are plausible. Issuers could position reserves where redemption demand concentrates, which shrinks the mismatch without a new rule. Or the G20 could turn a monitoring report into procedures: officials said they looked forward to the FSB's findings on cross-border vulnerabilities and the data needed to monitor them [16].
What to watch
- The Oct. 15 G20 communique: whether it tasks the FSB with cross-border crisis procedures for stablecoins or only notes the report.
- Whether the FSB's monitoring data show what share of the $300 billion is issued under shared-liability, redeem-anywhere arrangements.
- Any invocation of Circle France's deferral right, and where USDC trades on secondary markets while it applies.
Clarity's read
What the record supports and how the coverage leans. The claims behind it follow.
Reality
- Evidence62
- Adoption
- Insufficient
- Hype gap−5
- Incentives
- Insufficient
- Confidence65
Claim ledger
Ranked by verification strength, evidence, and original report placement.
- [1]
In an Oct. 12 report, the FSB said stablecoin issuers operating through affiliated entities in different countries could struggle to meet concentrated withdrawal demands when their reserve assets are held elsewhere.
ReportedSupportedSource: CryptoSlate, reporting the FSB's Oct. 12 report2 sources— create a free account to open themView cited source - [2]
The report comes ahead of an Oct. 15 meeting of G20 finance ministers and central bank governors.
- [3]
The FSB published its report, Cross-border Vulnerabilities and Financial Stability Monitoring of Global Stablecoin Arrangements, on October 12; it examines vulnerabilities of global stablecoins and the data authorities need to assess them, and addresses cross-border cooperation and information-sharing as regulators implement the FSB's 2023 recommendations.
- [4]
The report focuses on monitoring and assessing vulnerabilities and does not announce a new stablecoin ban or introduce specific additional restrictions on issuers.
- [5]
The stablecoin market was valued at approximately $300 billion in mid-2026, with 99% of its value pegged to the US dollar.
- [6]
FSB Chair Andrew Bailey said international regulatory coordination remains underdeveloped, leaving authorities without mature arrangements for managing cross-border stablecoin failures.
- [7]
The FSB identified vulnerabilities in stablecoins issued by multiple affiliated companies that share liability for the same token while maintaining separate reserves, where holders may redeem through any participating issuer regardless of where the tokens were originally issued.
- [8]
Moving reserves between entities could resolve a redemption imbalance under normal conditions, but banking restrictions, settlement delays and differences in national regulations could complicate those transfers during a market panic.
- [9]
Stablecoins 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.
- [10]
The FSB warned that delays in meeting redemptions could push holders to sell stablecoins at discounts on secondary markets, potentially destabilizing their dollar pegs, and that a large run could spill into traditional finance if issuers liquidate reserve assets rapidly or withdraw substantial deposits from banks.
- [11]
Circle's redemption policy, updated in September, has Circle co-issue USDC through its French entity for the European Economic Area and its US entity for other markets, and allows Circle France to adjust or defer certain redemption requests during a defined stress event when the two entities cannot complete reserve rebalancing, while preserving holders' rights to redemption at par.
- [12]
Circle's provisions describe contingency arrangements rather than an existing liquidity failure, and they operate under Circle's specific jurisdictional redemption rules, which differ from the FSB's unrestricted cross-issuer redemption model.
- [13]
Issuers may struggle to identify where their tokens are held because blockchain transactions can be pseudonymous, and differences in national insolvency laws could create uncertainty over which regulator has authority to intervene and how remaining reserves should be distributed.
- [14]
The FSB's 2025 assessment found substantial gaps in countries' implementation of its global stablecoin recommendations, increasing opportunities for issuers to structure operations across jurisdictions with different supervisory requirements.
- [15]
The G20 Chair's Statement issued after a September 1 meeting in Asheville, North Carolina, called for regulatory and supervisory frameworks that establish "clear pathways" for responsible digital-asset innovation while preserving financial stability.
- [16]
G20 officials said they looked forward to the FSB's findings on cross-border vulnerabilities associated with global stablecoins and the data needed to monitor them.
- [17]
"The pace of change in the financial system continues to accelerate," Bailey wrote in his October 12 letter.
ReportedSupportedSource: FSB Chair Andrew Bailey, in a letter dated October 12, as quoted by CryptoTimesView cited source - [18]
About $297 billion of the roughly $300 billion stablecoin market is pegged to the US dollar.
- [19]
About $3 billion of the roughly $300 billion market is not dollar-pegged.
Sources
2 independent publishers whose own reporting we read for this story.
- cryptoslate.comGlobal watchdog warns the $300 billion stablecoin market could face bank runs even with full reserves
1 article · October 12, 2026
- cryptotimes.ioFSB Flags Stablecoin and AI Risks Ahead of G20 Meeting
1 article · October 12, 2026
Topics and entities
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Topics
- Stablecoin RegulationFollow
- Cross-border supervisionFollow
- Bank funding and financial stabilityFollow