Stablecoins are designed to move easily across networks and jurisdictions. A token issued in one country can be held, traded or used elsewhere, often around the clock. But the institutions behind that token, such as the issuer, the custodians holding its reserves and the legal framework that protects holders, are typically rooted in specific jurisdictions. This tension between global networks and localised actors is the focus of a new Financial Stability Board paper, Global Stablecoin Arrangements: Cross-border vulnerabilities and financial stability monitoring. The paper examines key three questions: how global stablecoins may transmit financial stress across borders, why those risks are difficult for any one regulator to see clearly, and what authorities may need to monitor them effectively.
Why do cross-border structures matter?
The FSB defines global stablecoins as those that have a reach and use across multiple jurisdictions and could become systemically important in one or more of them. Stablecoins remain a rapidly evolving landscape and it is notable that as of mid-2026, the asset’s market value was estimated to be around $300 billion, with 99% linked to the US dollar.*
The key challenge acknowledged by FSB’s report is that stablecoins can move globally while the reserves backing them remain tied to particular banks, markets and legal systems. This matters in periods of stress. Stablecoins can trade 24/7, but the markets and institutions supporting their reserves may not operate at the same speed. If many users try to redeem at once, the issuer may need to sell reserve assets or move funds through traditional financial institutions. This redemption pressure, in severe cases, may transmit stress to banks, reserve asset markets or payment systems.
The problem becomes even harder when several entities across different countries are involved in the issuance of a stablecoin. While reserves may be spread across jurisdictions, redemption demand can become concentrated in one place. Managing that stress depends on continued liquidity, market access and coordination when conditions are most difficult.
Why is monitoring stablecoins difficult?
Stablecoins generate large amounts of transaction data. Still, regulators may not always be able to understand this data well enough to know where risks are building. To illustrate, transactions on public blockchains may be visible, but wallet holders are often pseudonymous. Authorities may not know where users are located, what transactions are for, or where redemption pressure is emerging. Regulators also rely heavily on private data providers, whose methods can differ and produce inconsistent results.
The result is an unusual problem: abundant data that is not always reliable or verifiable
What does the FSB recommend?
The FSB points to three priorities: developing clearer metrics for financial-stability monitoring, improving cross-border information-sharing and regulatory cooperation, and making stablecoin data more consistent and comparable across on-chain and off-chain sources.
It also stresses the importance of understanding how global stablecoins would be managed in periods of severe stress or failure, particularly when issuers, reserves and users are spread across different jurisdictions.
For India, this matters because the risks do not arise only where stablecoins are issued. They can also affect countries where foreign-issued stablecoins are widely held or used.
Indian users already hold and transact in foreign-issued, dollar-linked stablecoins. That makes the FSB’s cross-border data problem concrete and directly relevant since Indian regulators may need visibility into activity involving assets whose issuers, reserves and legal frameworks sit outside India.
As India develops its digital asset framework, the FSB’s analysis reinforces a simple point: effective oversight will depend not only on domestic rules, but also on access to cross-border data, regulatory cooperation and visibility into where stablecoin risks actually sit.