Financial Stability Board chair urges consistent implementation of stablecoin guardrails and continued work to improve cross-border payments

In remarks at the Group of Thirty Plenary Meeting in Berlin, Financial Stability Board Chair Klaas Knot set out the FSB’s approach to payments innovation, emphasising that stablecoins performing deposit-like or e-money-like functions should face equivalent regulatory and supervisory standards under the “same activity, same risk, same regulation” principle. He framed the FSB’s work as aimed at allowing innovation to develop within public policy objectives while managing systemic and cross-border spillovers. Knot cited Facebook’s 2019 Libra announcement as illustrating how rapidly a potential global stablecoin can trigger financial stability concerns, and described the global response as resting on two pillars: the FSB’s high-level stablecoin recommendations (published in 2020 and revised in 2023) and the G20 Cross-Border Payments Roadmap. He highlighted risks including regulatory perimeter gaps, the potential for runs on large stablecoins, and increasing interconnectedness with traditional finance via short-term funding markets, arguing that guardrails for transparency, governance and risk management need consistent cross-jurisdictional implementation to avoid regulatory arbitrage. On cross-border payments, he noted persistent inefficiencies and the lack of an overarching global governance framework, and pointed to ongoing work with the Committee on Payments and Market Infrastructures and other stakeholders to align technical standards and legal, regulatory and supervisory frameworks, irrespective of the underlying technology.