How Can You Get Your Money Back If a Stablecoin Company Fails? FSB Warns of Crisis Risks
The Financial Stability Board (FSB) has urged countries to prepare for crises together, warning of cross-border gaps that could make it harder for users to recover their money if a global stablecoin issuer goes bankrupt.
According to a report cited by CoinDesk, the FSB, the G20’s financial watchdog, said that regulations developing at different paces across countries could create problems in a potential crisis. The organization believes that global stablecoin arrangements have not yet been adequately tested under severe market stress and bankruptcy conditions.
According to data cited in the report, the stablecoin market grew from about $206 billion at the start of 2025 to $306 billion. Assets pegged to the U.S. dollar make up most of the market.
Redemption requests could be in one country while reserves remain in another
In the model the FSB highlights in particular, different companies within the same group can issue the same stablecoin in different countries. While the companies share liabilities, the reserves backing those liabilities may be held in separate countries.
If users can request redemption from any issuer in the group, requests could concentrate at a single company. If the necessary assets are in another country, moving the reserves during a crisis could be difficult. It could also become complicated to determine which country’s rules would apply if an issuer went bankrupt and how users could file claims.
24/7 trading does not align with reserve market hours
Stablecoins can be bought and sold around the clock, but the markets for the reserve assets backing them are open only at certain times. If redemptions cannot keep up with demand during a wave of heavy selling, the token could lose its peg.
Deep and liquid secondary markets can help bring a token back toward its peg through trades that take advantage of price differences. By contrast, forced reserve sales and withdrawals of bank deposits could also transmit pressure to traditional financial markets.
FSB calls on countries to prepare together
The organization also stresses that difficulties in determining which countries stablecoin holders are in can complicate crisis management. It therefore calls for stronger information sharing, monitoring, and crisis planning among countries.
The recommendations are not legally binding, but member countries tend to commit to implementing agreed standards at the national level. The report was published ahead of the October 15 meeting of G20 finance ministers and central bank governors.