FSB Report Highlights Cross-Border Insolvency Risks in Stablecoin Markets

Every financial instrument looks sound until the day it is asked to perform under pressure. Stablecoins have not had that day yet.

That is the core message of a new report from the Financial Stability Board, the body that coordinates financial regulation for the G20. The FSB found that global stablecoins have not been tested under severe stress or insolvency. It also found that the national rules meant to govern them are developing at different speeds.

The result, in the FSB’s view, is a gap. If a major issuer failed, it is not clear how holders would recover their funds.

For bitcoiners, this is a familiar argument in unfamiliar clothing. It is worth reading closely anyway.

A Market Built Fast, Rules Built Slowly

The numbers explain why the FSB is paying attention. Stablecoin capitalization stood at around $206 billion at the start of 2025 and has since grown to...

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