Global Stablecoin Arrangements: Cross-Border Vulnerabilities and Financial Stability Monitoring (FSB)

The Financial Stability Board (FSB) published a summary of its ongoing monitoring work on global stablecoin arrangements. It highlights that the borderless, round-the-clock mobility of stablecoin liabilities fundamentally conflicts with the jurisdictionally anchored nature of their reserve assets and redemption frameworks, escalating run risks and potential spillover into traditional financial markets. Complex, multi-issuer structures further obscure oversight and complicate reserve rebalancing during stress events. Furthermore, the FSB notes severe structural data deficiencies; authorities currently rely on opaque private data compilers, and blockchain pseudonymity impedes accurate geographic or use-case attribution. To mitigate these regulatory blind spots, the FSB advocates for enhanced cross-border cooperation, standardized monitoring metrics, and improved industry data disclosures. [FSB]

BTW if you want to see a complete database of my DFC-related posts going back years, including many that didn’t make the Daily Digest cut, click here.

FYI I produce a monthly digest of digital fiat currency (DFC) developments exclusively for the official sector (e.g., central banks, ministries of finance and international financial institution (e.g., the BIS, IMF, OECD, World Bank)) plus academics and firms that are active in the DFC space (commercial banks, technology providers, consultants, etc.). (DFCs include central bank digital currency (CBDC), stablecoins and tokenized deposits.) It goes out via email on the first business day of every month, and if you’re interested in being on the mailing list, please email me at john@kiffmeister.com.