Global watchdog warns the $300 billion stablecoin market could face bank runs even with full reserves
The Financial Stability Board warned that stablecoin issuers operating across borders could struggle to meet concentrated redemptions if reserves are held in other jurisdictions and cannot be transferred quickly during market stress. Delays could push tokens below their dollar pegs and trigger rapid reserve liquidations or bank withdrawals, spreading stress to traditional finance. The FSB highlighted risks involving affiliated issuers that share token liabilities but hold separate reserves, along with uncertainty over insolvency rules and regulatory responsibility. It urged stronger international information sharing, monitoring and crisis planning, while noting that national implementation of its recommendations remains uneven. The findings are non-binding; no common timetable for cross-border failure procedures has been set.
