Multi-issuer stablecoins can take redemptions in one country while reserves sit in another, FSB warns

The market in question grew from about $206 billion at the start of 2025 to $306 billion, according to CoinDesk's account of the report ^[7]. That is a gain of $100 billion, or 48.5% ^[17], and in the FSB's telling none of it has been through a severe stress or an insolvency ^[1].

The scenario the FSB worries about is easy to state. Affiliated companies issue one stablecoin, share liability for it and keep reserve assets in separate jurisdictions ^[2]. If holders can redeem with any issuer in the group, demand can pile up on a single entity while the assets it needs sit elsewhere, and moving those assets may be harder in a crisis ^[3]. Stablecoins also trade around the clock while the markets for the assets behind them keep set hours, so a token may lose its peg if redemptions cannot keep pace with selling ^[12]. If an issuer fails, it may be difficult to determine which country's insolvency rules apply ^[15].

Chair Andrew Bailey's letter accompanying the October 12 note ^[6] put the underlying problem in one sentence. "Global stablecoin arrangements are inherently cross-border, yet national regulations are taking shape at different speeds and cross-border cooperation in this area is still in its infancy," he wrote ^[4]. The FSB's own yardstick for national progress is thin: its 2025 survey found only 11 of 28 jurisdictions had completed stablecoin regulatory frameworks ^[9]. That leaves 17 jurisdictions, or 61%, without one ^[18].

We think the remedy covers the half of the problem that regulators can see. Information sharing can tell one authority where an issuer's reserves sit. It cannot tell any authority where a holder sits, because, according to the FSB, the pseudonymous nature of crypto transactions makes it hard to tell where holders are based and which jurisdiction applies ^[16]. None of the three asks in Crypto Briefing's account of the note requires an issuer to move reserves or change its structure ^[10].

There are at least three ways this goes differently. The run may never come. Arbitrage may close the gap before a queue forms, since the FSB itself noted that deep, liquid secondary markets can pull a token back toward its peg ^[13]. Or the first failure may be a design the FSB has not singled out. The coverage did not include a figure for how much reserve sits outside the jurisdiction of the issuer that would take redemptions. We would be wrong if a multi-issuer token took a large redemption wave and every issuer in the group paid out at par without a regulator needing to trace a holder or move a reserve.