The Financial Stability Board has warned G20 finance ministers that authorities depend largely on private data compilers to track stablecoins, which are pegged to traditional currencies and held in large numbers across borders. The warning came in a five-page note delivered on 12 October, ahead of a ministers’ meeting on 15 October, with a cover letter from Andrew Bailey. The stablecoin market is about 300 billion US dollars in capitalisation, and the FSB said that figure has been practically unchanged over the past year.
The FSB said an issuer may not know who holds its liabilities, where those holders are based, or where redemption demand will come from. Almost all of the market, 99 percent, is pegged to the US dollar. The note said the cleaning of industry data has largely been left to the private sector because it is costly.
Gaps in oversight
The note said no national framework for stablecoins has yet been tested under severe stress. The FSB did not set a report deadline or issue new recommendations, and its 2023 recommendations remain the reference point.
The note proposed three workstreams: common metrics, the cross-border use of data, and industry collection practices. The FSB gave no timetable for any of them.
US rules in progress
In the United States, the consultation on rules implementing the GENIUS Act closed on 19 October. The FSB note does not say how those rules will affect the gaps it identifies.
Related: FSB warns of stability risks in US$300 billion stablecoin market · Bitcoin touches $86,000 as spot ETF inflows near $1 billion
Source: Financial Stability Board
