FSB Chair Klaas Knot: Stablecoins Nearing Systemic Risk

- Outgoing FSB Chair warns of systemic risk from stablecoins - US Senate advances GENIUS Act to regulate payment stablecoins On June 12, 2025, Cryptopolitan on Binance Square, Cointelegraph, and Dimsum Daily reported that Klaas Knot, the outgoing Chair of the Financial Stability Board (FSB), warned that crypto assets, particularly stablecoins, are approaching a "tipping point" for systemic risk to the global financial system. Speaking in Madrid on June 12, Knot noted that while crypto has not posed a systemic risk until now, recent developments are shifting that outlook. Knot specifically highlighted that stablecoin issuers now hold substantial amounts of US Treasuries. During his speech in Madrid on June 12, FSB Chair Klaas Knot stated, "this situation necessitates close monitoring." Knot, who also heads the Dutch central bank, further emphasized that retail investors can now access crypto more easily. He noted this increased access, particularly through crypto Exchange Traded Funds (ETFs), has strengthened connections between the crypto world and the traditional financial system, and stressed that regulatory frameworks must adapt accordingly as the crypto landscape evolves. Knot's remarks coincided with the US Senate's vote to advance the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act. This bill, which aims to establish regulatory rules for payment stablecoins, requires further votes in the Senate and approval from the House before becoming law. The European Central Bank (ECB) also expressed concerns. According to its May 2025 Financial Stability Review, the ECB noted growing dangers from crypto assets like stablecoins, highlighting that their increasing values and deeper links with traditional banks and markets could contribute to financial instability. Klaas Knot's terms at the FSB and the Dutch central bank will end on June 30, 2025. Bank of England Governor Andrew Bailey will succeed him at the FSB. As of June 12, at 17:16 UTC, Tether USDt (USDT) was trading at $1, with its 24-hour trading volume showing a -0.006% change. Similarly, at 17:17 UTC on June 12, USDC (USDC) traded at $1, its 24-hour trading volume also reflecting a -0.006% change.