Financial Stability

Chinese authorities have opened a fresh crackdown on stablecoins, tightening rules and enforcement that hit issuers and cross‑border flows. Observers warn the moves could be about control or part of a broader push that heightens geopolitical currency tensions.

Fed Governor Michelle Bowman said regulators are preparing new rules aimed at banks and stablecoins, flagging tighter oversight to address risks and regulatory gaps. The announcement points to forthcoming policy moves that could reshape how banks interact with stablecoin issuers.

South Africa’s Reserve Bank has warned that rising adoption of digital assets, particularly stablecoins, could threaten financial stability. Regulators may step up monitoring and consider tighter rules as risks around backing, liquidity and cross‑border flows grow.

The European Central Bank says rapid stablecoin growth could threaten euro-area financial stability despite currently limited exposure. Regulators are urged to step up monitoring and consider policy measures to limit systemic fallout.

The European Central Bank said Monday that stablecoins may siphon off important retail deposits from euro-area banks and warned a run on one of these coins could pose risks to global financial stability.

The G20’s financial stability watchdog warned leaders ahead of the South Africa summit that rapid growth in private credit markets and stablecoins warrants closer scrutiny and stronger oversight. It urged coordinated action to address opacity, liquidity risks and cross-border spillovers.

Dutch central bank governor Olaf Sleijpen warned that a run on stablecoins could force issuers to liquidate reserve assets, amplifying market stress and complicating the ECB's policy choices.