A stablecoin can circulate around the clock while its reserves, redemption channels and legal protections remain tied to particular jurisdictions. That split is the central problem in a new Financial Stability Board note on cross-border vulnerabilities. The FSB estimates that stablecoins were worth about $300 billion in mid-2026, roughly unchanged from a year earlier, and that 99% of their value was pegged to the US dollar.
Supervisors cannot see the full liability map
Banks know who holds their deposits and can view redemption demands against the balance sheet. A stablecoin issuer may not know where token holders live or where redemptions will surface. Tokens can move between wallets, exchanges and jurisdictions at any hour, but reserves still settle through financial institutions with operating hours, national rules and specific insolvency regimes.
This mismatch changes the shape of a run. Heavy selling on secondary markets can push a token below its peg before reserve assets can be sold and cash delivered to redeemers. Deep markets may also help arbitrageurs restore the peg, so trading volume alone does not identify the direction of risk. Supervisors need to connect market liquidity with redemption capacity and the location and quality of reserves.
Multi-issuer structures add another coordination test
Some arrangements allow affiliated issuers to share responsibility for one stablecoin while holding separate reserve pools. Redemption demand can then concentrate at one entity even when reserves sit elsewhere. Moving those reserves depends on market access, information sharing and cross-border coordination, all of which may weaken during stress. Holder claims can become harder to determine when the applicable insolvency law is unclear.
The FSB says global stablecoins and national frameworks have not yet been tested in severe stress or insolvency. It also warns that gaps between jurisdictions can encourage issuers to operate from less regulated locations. For emerging markets, the threshold for systemic risk may be lower because stablecoins can contribute to currency substitution, bank disintermediation or pressure on capital-flow controls.
Public blockchain data does not solve attribution
On-chain records show transfers, balances and smart-contract activity, but pseudonymous addresses rarely establish who owns a token, where that holder is based or why a transfer occurred. Authorities therefore rely on private data compilers whose methods, coverage and classifications can differ. The same raw activity may produce inconsistent estimates across providers.
The practical monitoring set is broader than market capitalization. The FSB points to secondary-market depth and liquidity, the geographic distribution of holdings and redemptions, reserve location, and the structure of multi-issuer arrangements. Authorities also need consistent definitions and methods before figures from different data providers can be compared reliably. Comparable reporting methods and cross-border information sharing would make those measures more useful. Until then, a stablecoin’s peg and reserve headline provide only part of the risk picture.
Source: BlockchainReporter.