03-27-2026 
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The Financial Stability Board (FSB)—an international body that monitors and makes recommendations about the global financial system—published its 2025 Annual Report, warning that implementation gaps and inconsistencies in digital currency and stablecoin regulation could pose risks to financial stability and the development of a resilient digital asset ecosystem.
- FSB publishes its 2025 Annual Report
- Regulation and implementation inconsistencies
- Stablecoins might be pose imminent threat
- FSB examines issues concerning AI
The report, published on March 24, described the FSB’s work to promote global financial stability in 2025 and its assessment of the current state of the global finance space, highlighting several “long-standing vulnerabilities” in the financial system, including rising sovereign debt levels, the rapid growth of nonbank financial intermediation, and the “significant volatility in crypto markets.”
On this latter concern, FSB Chair Andrew Bailey wrote in his foreword to the report that the expansion of digital assets and advancements in artificial intelligence (AI) were “reshaping the financial landscape,” while underscoring that financial stability remains “an essential pre-condition for unlocking these opportunities and achieving sustainable economic growth.”
More broadly, the report highlighted the need for a “a resilient digital asset ecosystem” and urged national authorities worldwide to “address identified gaps and inconsistencies that could pose risks to financial stability.”
Inconsistencies in regulation and implementation
Since 2015, the FSB has published annual reports on the implementation of financial regulatory reforms and the progress being made by FSB members—including 71 institutions, comprising ministries of finance, central banks, and supervisory and regulatory authorities from 25 jurisdictions—in addressing financial vulnerabilities and building a more resilient financial system.
Concerns about digital assets have featured in these annual reports for some time, particularly regarding the volatility of the space. For this reason, in 2023 it published its ‘Global Regulatory Framework for Crypto-Assets and Stablecoins,’ which focused on regulatory, supervisory, and oversight issues related to digital currencies and outlined several high-level recommendations “to help foster safe innovation.”
This included comprehensive regulation of digital asset service providers; addressing financial stability risks that arise from these interconnections and interdependencies; requiring digital assets issuers and service providers to collect and provide authorities with access to accurate data; and requiring that digital assets issuers and service providers disclose to users and relevant stakeholders comprehensive and transparent information regarding their governance framework, operations, risk profiles and financial conditions.
In its latest report, the FSB said it conducted a thematic peer review of the implementation of its 2023 framework across 37 jurisdictions, including FSB and non-FSB members, finding that while some have made progress on the recommendations, implementation has been inconsistent, and many countries have yet to act.
It noted, “significant gaps and inconsistencies that could pose risks to financial stability and to the development of a resilient digital asset ecosystem.”
These findings are fairly consistent with the current state of play in global digital asset regulation, which remains fragmented and inconsistent across major jurisdictions.
For example, the European Union’s (EU) comprehensive and tailored Markets in Crypto Assets (MiCA) regulation came fully into force in 2025, including a licensing, disclosure, and reporting regime covering both digital assets and stablecoins, issuers and service providers; while, in contrast, the United Kingdom and United States are still working on digital asset market structure regulation, India—the world’s top crypto adopter—lacks any notable regulation or progress towards. In China, the sector remains essentially banned.
To address the risks to financial stability posed by this disparate regulatory approach, the FSB underscored the importance of implementing the recommendations in its 2023 framework, reiterating that “uneven implementation creates opportunities for regulatory arbitrage and complicates oversight of the inherently global and evolving crypto asset market.”
Therefore, the 2025 review recommended strengthening enforcement practices, including existing mechanisms to facilitate cross-border cooperation and permit information sharing across jurisdictions relating to digital asset markets.Crypto assets not an imminent threat, stablecoins might be
Despite this call for greater regulatory unity, the FSB suggested that the broader risks posed by digital assets to financial stability remain low.
“Crypto-asset markets exhibited significant volatility in 2025, but financial system impacts remained limited despite growing interlinkages with the broader financial system,” read the report. “Despite growth in these markets in recent years, crypto-assets and stablecoins are not widely used in financial services supporting the real economy (such as payments), and decentralised finance remains a small market segment.”
However, it caveated this by noting that “linkages with core financial markets and institutions are increasing, alongside market and regulatory developments in some jurisdictions.”
This is particularly true for stablecoins—a sector that reached a total market cap of over $300 billion in December 2025 and is predicted to achieve a $1.9 trillion valuation by the end of the decade—which the FSB pointed to as an area requiring increased vigilance.
“While stablecoins can provide benefits, it will also be necessary to assess how the structure of the sector develops to understand and respond to vulnerabilities which may arise relating to liquidity, operational risk and interlinkages,” said the report. “Risks may also arise from certain global stablecoins that are issued and circulate across multiple jurisdictions and therefore may need to manage reserve assets across jurisdictional borders.”
One example given was foreign currency-denominated stablecoins, which potentially pose heightened risks to emerging markets and developing economies, such as currency substitution, reduced use of domestic payment systems, and weakened effectiveness of domestic monetary policy.
AI is the next concern
Going forward, the FSB said it would continue to monitor developments related to digital assets and examine issues related to possible stablecoin vulnerabilities, adding that it would “intensify efforts to drive jurisdictional implementation of the policy recommendations in order to produce tangible improvements for end-users at the global level.”
Beyond blockchain, the international standard-setting body also highlighted several vulnerabilities that the growth of AI technology could amplify, including third-party dependencies, cyber risks, and challenges related to model risk and governance.
In this rapidly evolving area, the FSB committed to “undertaking work on sound practices for AI adoption, use, and innovation by financial institutions.”
Watch: Breaking down solutions to blockchain regulation hurdles
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