October 20, 2025
By Anjali Kochhar
The Financial Stability Board (FSB), the global financial watchdog that advises G20 nations, has warned of “significant gaps” in cryptocurrency regulations across major economies, cautioning that fragmented rulemaking could increase systemic risks to the international financial system.
In a report released on Thursday, the FSB said that while many countries have introduced crypto-related rules, the overall implementation remains inconsistent and insufficient. The report highlighted that crypto markets are global in nature, yet regulatory responses remain largely domestic and uncoordinated, creating vulnerabilities that could be exploited by unregulated actors.
“The implementation of crypto rules is fragmented, inconsistent, and insufficient to address the global nature of crypto-asset markets,” the report stated. FSB Secretary-General John Schindler emphasized that crypto assets “can move across borders very easily, much more easily than other financial assets,” making international coordination essential.
According to the FSB, although the current impact of crypto on global financial stability is limited, the risk is growing as the market expands. The global cryptocurrency market has more than doubled in value over the past year, reaching about US$4 trillion.
A key area of concern for regulators remains stablecoins, which are digital tokens pegged to fiat currencies such as the US dollar. The FSB noted that many jurisdictions have yet to establish comprehensive frameworks for these assets despite their rapid growth. The global stablecoin market is estimated to have risen by nearly 75 percent in the past year to around US$290 billion.
The report reviewed 29 jurisdictions, including the United States, European Union, Hong Kong, and the United Kingdom, and found uneven progress in implementing global standards. It called for enhanced cross-border cooperation and consistent oversight to prevent regulatory loopholes and ensure that crypto activities are subject to uniform rules worldwide.
The FSB’s warning comes amid renewed volatility in digital asset markets and memories of the 2022 collapses of major platforms such as FTX and Terra/Luna, which exposed the fragility of the sector.
To address these challenges, the FSB issued eight key recommendations urging countries to accelerate the adoption of comprehensive crypto regulations. These include stronger supervision, better coordination among national regulators, and improved data sharing to track cross-border crypto flows.
The report concluded that while crypto does not currently pose an immediate threat to global financial stability, the window for regulators to act decisively is narrowing. “Closing the regulatory gaps before risks grow unmanageable is essential to maintaining financial stability,” the FSB said.
About the author
Anjali Kochhar covers cryptocurrency and blockchain stories in India as well as globally. Having been in the field of media and journalism for over four years now, she has developed a sharp news sense and works hard to present information that goes beyond the obvious. She is an avid reader and loves writing on a wide range of subjects.
