The Financial Stability Board (FSB), a global financial watchdog hosted by the Bank for International Settlements, warned on Tuesday that foreign currency-denominated stablecoins can pose financial stability and macroeconomic risks for emerging market and developing economies.
In its annual report for 2025, the FSB said that US dollar-denominated stablecoins circulating across multiple jurisdictions pose “potentially more acute” risks to the financial stability of emerging economies.
The report said those risks can include currency substitution, reduced use of domestic payment systems, lower effectiveness of domestic monetary policy, strains on fiscal resources and the circumvention of capital flow measures.
The FSB said it remains necessary for lawmakers to assess how the stablecoin sector develops in order to understand and respond to vulnerabilities related to liquidity, operational risk and interlinkages with the broader financial system.
The report builds on the FSB’s 2023 global regulatory framework for crypto asset activities and global stablecoin arrangements, which the board reviewed in 2025 and said still shows significant gaps and inconsistencies in implementation.
FSB annual report for 2025. Source: FSB
The FSB was established in April 2009 as a successor to the Financial Stability Forum. It was created by G20 economies after the 2008 financial crisis to strengthen global financial systems.
**Related: **__FSB warns crypto nearing ‘tipping point’ as ties to TradFi deepen
Stablecoins still have limited real use
Crypto assets and stablecoins still lack adoption in real economic use cases such as payments, the FSB said in the report.
“Despite growth in these markets in recent years, crypto-assets and stablecoins are not widely used in financial services supporting the real economy.”
The report said stablecoins can provide benefits, but added that authorities should continue monitoring vulnerabilities tied to interlinkages, liquidity and operational risks as linkages with core financial markets and institutions increase.
Daily crypto-asset market value, monthly transaction volume adjusted for duplicate or automated activity. Source: FSB
The FSB also outlined other key areas of focus in 2026, including digital innovation related to crypto assets and monitoring stablecoin vulnerabilities.
Other focal points included monitoring vulnerabilities tied to private credit, nonbank financial intermediation, cross-border payments, and the implementation of additional measures tied to crisis preparedness and regulatory modernization.
**Related: **__FSB calls for stricter oversight against AI vulnerabilities
**Magazine: **__Can privacy survive in US crypto policy after Roman Storm’s conviction?
Cointelegraph is committed to independent, transparent journalism. This news article is produced in accordance with Cointelegraph’s Editorial Policy and aims to provide accurate and timely information. Readers are encouraged to verify information independently. Read our Editorial Policy https://cointelegraph.com/editorial-policy
- #Cryptocurrencies
- #Dollar
- #G20
- #Economy
- #Financial Systems
- #Stablecoin
- #Digital Dollar
- #Regulation
Disclaimer: The information on this page may come from third parties and does not represent the views or opinions of Gate. The content displayed on this page is for reference only and does not constitute any financial, investment, or legal advice. Gate does not guarantee the accuracy or completeness of the information and shall not be liable for any losses arising from the use of this information. Virtual asset investments carry high risks and are subject to significant price volatility. You may lose all of your invested principal. Please fully understand the relevant risks and make prudent decisions based on your own financial situation and risk tolerance. For details, please refer to
Disclaimer.
Related Articles
JPMorgan: U.S. CLARITY Act Negotiations Near Completion, Crypto Regulatory Framework in Sight
JPMorgan's recent report indicates that negotiations on the U.S. CLARITY Act are close to finalization, with only 2-3 issues remaining. The act seeks to clarify regulations for digital assets but lacks a formal text and scheduled vote, leaving its future uncertain, especially if political shifts occur in 2026.
GateNews32m ago
The Senate Banking Committee will move the “CLARITY Act” off the agenda for the week of April 20.
The CLARITY Act was not included in the April 20 agenda for consideration by Tim Scott, Chairman of the Senate Banking Committee. Senator Tom Tillis is set to release the latest draft, which includes compromise provisions related to stablecoin yield rates. Coinbase has switched to support, while the banking group still opposes the measure. The bill must pass multiple steps before it can become law.
MarketWhisper2h ago
Bank of England governor warns: Global stablecoin standards are lagging, calls for a unified regulatory framework
Bank of England Governor Andrew Bailey said at an IIF event that the effective functioning of stablecoins depends on users’ confidence in full redemption mechanisms, calling for the development of international standards. The United States has meanwhile released the GENIUS Act, requiring stablecoin issuers to meet compliance requirements. In South Korea, Circle’s CEO said there are no plans to launch a won-pegged stablecoin, and that the company is currently watching local legislative debates.
MarketWhisper2h ago
Cato Institute Recommends U.S. Eliminate Capital Gains Tax on Cryptocurrencies to Promote Monetary Competition
The Cato Institute urges the U.S. to abolish capital gains taxes on cryptocurrencies to simplify tax filing and enhance monetary competition. This move aims to encourage cryptocurrency use in transactions by lessening tax-related complexities.
GateNews3h ago
Senator Warren Presses Musk on X Money Risks, Citing Stablecoin Concerns and Regulatory Gaps
Senator Elizabeth Warren has asked Elon Musk for details on X Money, a payments feature for X, raising concerns about stablecoin risks, regulatory issues, financial stability, and data privacy, with a response due by April 21, 2026.
GateNews3h ago
