The Financial Stability Board (FSB) has warned G20 leaders that the rapid growth of private credit markets and stablecoins now requires intensified global oversight, ahead of next week’s summit in South Africa.
In a letter published Thursday, FSB Chair Andrew Bailey urged leaders to “modernise and strengthen” financial regulation without compromising stability. He highlighted the expanding role of non-bank financial intermediaries, saying private credit will be a core priority for the FSB in 2025.
Stablecoins flagged as urgent risk
Bailey called for “robust frameworks” for stablecoins, warning that regulatory divergences across countries add “complexity and potential risk”—especially as stablecoins operate cross-border.
Policymakers outside the U.S. fear widespread adoption of USD-backed stablecoins could partially dollarize economies, weaken monetary policy, and raise questions about who provides support in a crisis.
Basel III implementation delays
Bailey also criticized major economies for failing to implement Basel III capital rules.
- The EU and UK have postponed Basel 3.1 until 2027
- The U.S. has pushed back against current proposals
In response, the Basel Committee signaled it may adjust crypto-related capital requirements, given the “dramatic rise” in stablecoins since rules were agreed three years ago. The crypto framework is set for Jan 1, though neither the U.S. nor UK have committed.
With private credit projected to surpass $5 trillion globally by decade’s end and stablecoin circulation accelerating, the FSB says coordinated global action is increasingly urgent.