Andrew Bailey, Chair of the Financial Stability Board (FSB) and Governor of the Bank of England, has declared stablecoins a global regulatory priority just days before the G20 Finance Ministers and Central Bank Governors meeting in Durban, South Africa.

In a letter released Monday, Bailey reaffirmed the FSB’s commitment to fully implementing its 2023 global stablecoin recommendations, warning that recent market developments show increasing risks to financial stability. He emphasized that the FSB will continue to monitor developments across jurisdictions and called for greater cross-border regulatory coordination.

“The FSB remains committed to enhancing global financial stability by promoting the full and consistent implementation of our agreed recommendations on stablecoins and crypto-asset activities,” Bailey said in the letter.

Global Push for Regulatory Alignment

The G20, representing the world’s largest economies, has been a key driver of crypto oversight since the 2022 collapse of the TerraUSD stablecoin shook investor confidence and triggered a wave of regulatory urgency. The FSB’s latest recommendations, updated in 2023, called for stricter rules on:

• Governance structures of stablecoin issuers

• Reserve asset backing and transparency

• Redemption rights for stablecoin holders

• Cross-border supervision and information sharing

According to the FSB’s July 2025 progress report, only 9 out of 24 FSB jurisdictions have fully implemented these guidelines, while others are still in the legislative or consultation phase.

Bailey’s Stance: No to Private Stablecoins

Bailey has also reiterated his opposition to banks issuing private stablecoins independently of central bank oversight. Speaking at a policy roundtable in London earlier this month, he warned that allowing commercial banks to issue their own digital currencies could create fragmentation in the monetary system and threaten financial integrity.

“We support tokenized bank deposits under regulatory control—not the proliferation of privately issued tokens claiming to be money,” Bailey noted.

This view aligns with the Bank of England’s pilot program on tokenized deposits, which seeks to modernize the financial system while preserving central bank control over monetary policy.

Why It Matters Now

Stablecoins are increasingly used for cross-border payments, DeFi, and remittances in emerging markets. A June 2025 report by Chainalysis found that stablecoins accounted for over 65% of crypto transaction volume in sub-Saharan Africa, a region with limited access to traditional banking.

Meanwhile, Circle (issuer of USDC) and Tether (issuer of USDT)—the two largest stablecoin providers—have expanded their partnerships with payment firms and fintech platforms across Latin America and Africa. With stablecoins becoming a de facto dollar substitute in some economies, regulators worry that unbacked or poorly governed tokens could destabilize local currencies.

G20 Summit: A Defining Moment?

The G20 summit, taking place July 17–18 in Durban, is expected to feature stablecoins as a central topic. India and Brazil—both major voices in the Global South—have expressed concerns about the monetary sovereignty risks posed by stablecoin usage, especially in the absence of robust international safeguards.

The FSB’s push comes amid rising pressure from the International Monetary Fund (IMF) and Bank for International Settlements (BIS) to fast-track digital currency regulation and adoption of Central Bank Digital Currencies (CBDCs).

Outlook

With Bailey at the helm, the FSB is steering the G20 toward more cohesive oversight of stablecoins, signaling a potential turning point in how nations balance financial innovation with stability. If the G20 can achieve consensus this week, the world may be one step closer to a global regulatory framework for digital money.