The Financial Stability Board (FSB) has identified the growing influence of stablecoins as a crucial topic ahead of the upcoming G20 summit, where global leaders are set to convene.
In a communication directed to G20 finance ministers and central bank governors, newly appointed FSB Chair Andrew Bailey, who also serves as the Governor of the Bank of England, stressed the importance of evaluating the increasing role of stablecoins in the realms of payments and settlements as a vital aspect of international financial stability.
Concerns Raised Over Stablecoins’ Impact on Financial Integrity
“The risks and implications associated with stablecoins are not yet comprehensively understood, primarily due to the speed at which the market is evolving,” Bailey noted. “We must ensure that we implement the recommendations we have established, monitor developments in this sphere, and enhance collaboration across borders.”
This renewed focus on stablecoins follows earlier efforts by the FSB to instate regulations, beginning with the introduction of a global framework for monitoring their use in 2021.
The FSB has expressed concern regarding the escalating adoption of stablecoins in emerging markets, where they have gained traction as a preferable option to unstable local currencies and inefficient banking infrastructures. In light of this growing trend, the FSB has announced its intention to intensify its efforts to comprehend stablecoin-related risks in these regions.
The G20 summit, taking place under South Africa’s presidency, arrives at a pivotal moment. The global stablecoin market has recorded over $27.6 trillion in transactions during the first quarter of 2025, a figure that surpasses Visa’s total settlement volume for the entire year of 2023.
Stablecoins settle $27.6 trillion in Q1 2025, doubling Visa’s annual volume, as Ethereum’s infrastructure dominates global digital payments, even amid price turbulence.#Stablecoins #Ethereumhttps://t.co/LVFclqLGPX
— Finance Newso.com (@Finance Newso) April 18, 2025
In the United States, the passage of the GENIUS stablecoin bill represents a significant step towards the formal integration of stablecoins into the established financial framework.
Nevertheless, Bailey has expressed reservations regarding the systemic risks associated with this trend. In a recent discussion with The Sunday Times, he cautioned against the proliferation of private banks issuing their own stablecoins, arguing that such developments could jeopardize traditional credit frameworks and detract from monetary policy oversight.
BOE Governor Andrew Bailey has warned that big banks issuing private stablecoins would pose financial stability risks.#BankofEngland #AndrewBailey #Stablecoinshttps://t.co/9WpwUdkIAV
— Finance Newso.com (@Finance Newso) July 14, 2025
Instead of promoting stablecoins, Bailey advocates for the digitization of bank deposits, positioning it as a safer, more regulated alternative that maintains central bank authority.
The FSB’s advisories come during a time of heightened geopolitical and financial instability. Bailey’s correspondence references the market volatility experienced in April as indicative of vulnerabilities inherent in the financial system, particularly extending beyond conventional banking.
He emphasized the necessity for strong regulatory oversight and coordination, particularly as the industry shifts toward non-bank financial intermediation and the incorporation of emerging technologies like stablecoins.
Key concerns include the potential for stablecoins to disrupt the concept of “singleness of money,” which refers to the uniform trust in currency across the economy.
Bailey cautioned that if stablecoins circulate outside of regulated frameworks, they could create alternative forms of currency, complicating monetary policy and cross-border transactions.
Ethereum Surges Past $3,000 Amid Legislative Developments
Ethereum has surged past the $3,000 threshold, buoyed by renewed optimism surrounding U.S. legislative advancements related to stablecoins. In the past 24 hours, Ethereum’s price increased by 2.13%, settling at $3,028.
This price movement capped off a remarkable weekly increase of 19%, with some analysts suggesting this could represent a pivotal moment for Ethereum’s standing in the global financial landscape.
Bitcoin pumped hard after a bill was passed that aligned with the narrative.
Today, the “GENIUS bill” voting is allegedly starting.
Ethereum has become the backbone of the stablecoin ecosystem.
Are you connecting the dots? pic.twitter.com/Y4xHNIDWas
— Crypto Rover (@rovercrc) July 15, 2025
The newly established anticipation over the expected vote on the GENIUS Act by the U.S. House of Representatives has spurred this market reaction. The GENIUS Act—an acronym for Guiding and Establishing National Innovation for U.S. Stablecoins—received bipartisan support in the Senate last month and is designed to establish a formal regulatory framework for stablecoins in the United States. If enacted, it could provide unprecedented legal clarity for dollar-pegged digital assets, many of which utilize the Ethereum platform.
The recent surge in Ethereum’s price has led to speculation that the market is factoring in the potential ramifications of this proposed legislation.
Ethereum plays a pivotal role in the stablecoin ecosystem, hosting the majority of the total stablecoin supply, which was valued at $124.5 billion as of May 6, 2025. Tether (USDT) leads with a supply of $64.7 billion, followed by Circle’s USDC at $37 billion. Other notable tokens operating on the Ethereum platform include USDe, DAI, and PayPal’s PYUSD.
From its early days, when Ethereum managed only $124,000 in stablecoins, the network has evolved into the primary base for tokenized dollars, driving liquidity in decentralized finance, trading, and on-chain transactions.
According to reports from DeFiLlama and CryptoQuant, the total market capitalization of stablecoins recently surpassed $250 billion, reflecting a $33 billion increase within 2025 alone.
Stablecoin market cap has surged to $228B in 2025, with USDT and USDC driving $33B growth.#Stablecoins #DeFi https://t.co/y68WXWUZM6
— Finance Newso.com (@Finance Newso) June 13, 2025
This growth has reinstated vigorous activity across the Ethereum network. Current ERC-20 stablecoin reserves held by exchanges total $50 billion, with USDC standing out at $8 billion in reserves for 2025. As the House progresses toward a vote on the GENIUS Act during this so-called “Crypto Week,” optimism remains high. The passage of the GENIUS Act could solidify Ethereum’s role at the forefront of the dollar-based cryptocurrency economy.
The post Global Financial Watchdog Makes Stablecoins Top Priority Ahead of G20 Summit appeared first on Finance Newso.
