The Financial Stability Board (FSB) has highlighted the growing financial risks posed by dollar-denominated stablecoins in emerging markets. In its 2025 annual report, the FSB emphasized that these stablecoins could exacerbate financial instability by substituting local currencies, undermining domestic payment systems, and reducing the effectiveness of monetary policy. Additionally, they may increase fiscal pressures and facilitate the circumvention of capital flow management measures. The FSB stressed the importance of ongoing assessment of the stablecoin sector, particularly its vulnerabilities related to liquidity, operational risks, and connections with traditional financial systems. The board also called for the continued implementation of the global stablecoin regulatory framework established in 2023, noting existing gaps in its application.