Financial Stability Board warns cross-border frictions threaten stablecoin liquidity
The Financial Stability Board warned that the 300 billion dollar stablecoin market faces run risks if cross-border frictions prevent issuers from transferring reserve assets during periods of stress.
FTMQ Crypto, written by our newsroom0 views
The Financial Stability Board issued a warning on October 12 that the 300 billion dollar stablecoin market could experience redemption crises despite holding full reserves. CryptoSlate reported that the global financial regulator released its assessment ahead of a meeting of G20 finance ministers scheduled for October 15. [1]
According to CryptoSlate, the watchdog highlighted structural vulnerabilities among stablecoin issuers that operate via affiliated entities in multiple jurisdictions. If redemption demands concentrate heavily at a single entity during market stress, regulatory and operational frictions could prevent the rapid cross-border movement of backing assets held in other countries. [1]
G20 finance ministers and central bank governors gather regularly to discuss international economic policy and financial stability issues. The upcoming October 15 meeting provides a forum for policymakers to consider the regulatory recommendations raised in the latest report. [1]
In short
- The Financial Stability Board warned that the 300 billion dollar stablecoin market faces cross-border liquidity risks.
- Issuers operating through affiliated global entities may struggle to transfer reserves during localized redemption surges.
- The report was published on October 12 ahead of a G20 finance ministers meeting on October 15.
Sources
Every paragraph above points to the numbered items it rests on. Read the originals here.
- [1]Global watchdog warns the $300 billion stablecoin market could face bank runs even with full reservesCryptoSlate, 4h ago (the report this story comes from)
Our newsroom writes these reports with the help of software, from the 1 sources listed and nothing else, and checks them against those sources. Facts can still be wrong or move on; the originals are the record. Spotted a mistake? Write to daniel@monsterkong.com.
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