The global financial watchdog said stablecoin issuers operating through affiliated entities in different countries could struggle to meet concentrated withdrawal demands when their reserve assets are held elsewhere. The report flags particular vulnerabilities in stablecoins issued by multiple affiliated companies that share liability for the same token while maintaining separate reserves.
Under such arrangements, holders may redeem through any participating issuer regardless of where the token was originally issued. That flexibility creates liquidity mismatches when redemption demand concentrates in one jurisdiction while much of the collateral remains in another. Moving reserves between entities could resolve the imbalance under normal conditions, but banking restrictions, settlement delays and differences in national regulations could complicate transfers during a panic.
The FSB noted the speed at which stablecoins circulate amplifies the risk. Digital tokens move across borders and trade around the clock, while the Treasury securities, bank deposits and other traditional assets backing them remain subject to local financial-market operating hours and settlement arrangements. Delays in meeting redemptions could push holders to sell stablecoins at discounts on secondary markets, potentially destabilizing their dollar pegs. A sufficiently large run could also spill into traditional finance if issuers rapidly liquidate reserve assets or withdraw substantial deposits from banks.
Circle's European stablecoin arrangements illustrate how cross-border reserve management can affect redemption procedures. Circle co-issues USDC through its French entity for the European Economic Area and its US entity for markets outside the region, under a redemption policy updated in September.
FSB Chair Andrew Bailey said international regulatory coordination remains underdeveloped, leaving authorities without mature arrangements for managing cross-border stablecoin failures. The warning comes as regulators confront a stablecoin market valued at approximately $300 billion in mid-2026, with 99 percent of its value pegged to the US dollar.