FSB Implementation Report: Which Countries Are Following the Rules and Which Aren't

The Financial Stability Board’s thematic peer review on crypto-asset regulation, published in October 2025, is the most comprehensive international assessment of crypto regulatory implementation ever conducted. It reviewed 26 FSB member jurisdictions against the FSB’s 2023 high-level recommendations on crypto-asset activities and global stablecoin arrangements, using a methodology that combined self-assessment by national authorities with FSB Secretariat analysis and peer review.

The overall finding was directionally positive — more jurisdictions have more crypto regulation than two years ago — and substantially concerning in specific areas: stablecoin frameworks and cross-border cooperation were identified as persistent and significant gaps.

Methodology

The peer review methodology combined self-assessment questionnaires completed by each of the 26 FSB member jurisdictions, analysis of publicly available legislation and regulatory guidance, and structured dialogue between the FSB Secretariat and national authorities. The 26 FSB member jurisdictions include all G20 members plus several significant financial centres, representing the large majority of global crypto market activity.

Jurisdictions were assessed on a spectrum from “implemented” to “partially implemented” to “not yet implemented” for each of the key recommendation areas. The assessment distinguished between jurisdictions that had enacted legislation, those that had issued regulatory guidance, those with legislation under development, and those without substantive measures.

Jurisdictions Leading in Implementation

The FSB peer review identified a cluster of jurisdictions with comprehensive, implemented crypto frameworks that aligned closely with the 2023 recommendations.

European Union: MiCA, fully in force from December 2024, is assessed as broadly meeting the FSB recommendations on crypto-asset activities. MiCA’s CASP licensing requirements, customer asset protection rules, and governance requirements align with FSB recommendations. The stablecoin titles — addressing asset-referenced tokens and e-money tokens — address the FSB’s global stablecoin recommendations, though the review noted that the passporting of non-EU stablecoin issuers remains a coverage question.

United Kingdom: The UK’s crypto regulation implementation, while occurring after Brexit outside MiCA, has tracked FSB recommendations through the Financial Services and Markets Act 2023 and subsequent FCA rulemaking. The FCA’s crypto exchange registration requirements, AML/CFT application to VASPs, and consumer protection rules have progressively built out a framework. Gaps remain in comprehensive CASP licensing, with UK legislation still developing in some areas.

Singapore: The Monetary Authority of Singapore’s Payment Services Act and subsequent Digital Payment Token licensing regime have provided a comprehensive framework for crypto service providers, with requirements on customer asset segregation, fit-and-proper management, and AML/CFT that align with FSB recommendations. Singapore has also been active in international coordination through bilateral memoranda of understanding with other regulators.

Japan: The Financial Services Agency’s regulation of crypto-asset exchange service providers under the Payment Services Act has been in place since 2017 and has been progressively strengthened. Japan was among the first jurisdictions to require customer asset segregation, a direct lesson from the 2014 Mt. Gox exchange collapse. Japan’s framework is well-aligned with FSB recommendations on the crypto-asset activities side.

Jurisdictions with Significant Gaps

The peer review identified significant implementation gaps in a substantial number of FSB member jurisdictions — including some major economies.

United States: The US presents the most complex compliance picture. On crypto-asset activities, the US has state money transmission licensing, SEC and CFTC oversight in certain contexts, and FinCEN AML requirements — a patchwork that partially addresses FSB recommendations but lacks comprehensive CASP licensing. The GENIUS Act addressed stablecoins but narrowly. The FSB review noted that comprehensive federal crypto-asset service provider legislation remained absent, creating regulatory gaps relative to FSB recommendations.

Other jurisdictions: Several G20 members — including some significant emerging market economies — had not enacted comprehensive frameworks as of the review date. The review did not name jurisdictions individually in all instances (peer review diplomacy), but the aggregate finding was that between a third and half of assessed jurisdictions had material gaps in at least one recommendation area.

Stablecoin Frameworks: The Most Significant Gap

The peer review’s most striking finding was the near-universal inadequacy of stablecoin regulatory frameworks outside the EU. The FSB’s 2023 stablecoin recommendations — requiring reserve standards, redemption rights, governance frameworks, and regulatory oversight — had been implemented in comprehensive form almost exclusively within MiCA. The UK had legislation in development. Singapore had partial measures. The US GENIUS Act addressed federal stablecoin issuance but with implementation still maturing. Most other jurisdictions lacked stablecoin-specific regulation entirely.

This matters because global stablecoins — particularly USDT (Tether) and USDC — operate at enormous scale: combined market capitalisation exceeds $150 billion. These instruments are used globally as settlement currency in crypto markets, as cross-border payment tools, and increasingly as savings instruments in high-inflation emerging market economies. Their systemic importance has grown substantially while regulatory frameworks addressing them have lagged.

The reserve transparency question is particularly live. Tether’s reserve composition — the assets backing USDT — has been subject to persistent disclosure questions. The FSB’s recommendations require detailed, frequent disclosure of reserve asset compositions, liquidity, and management. Few jurisdictions outside the EU have enacted requirements meeting this standard.

Cross-Border Cooperation: The Weakest Area

Cross-border regulatory cooperation was identified as the weakest area of implementation across the board. The FSB recommendations require jurisdictions to have formal arrangements for sharing supervisory information with regulators in other jurisdictions — agreements analogous to the memoranda of understanding that securities regulators maintain for cross-border enforcement cooperation.

As of the October 2025 review, most pairs of FSB member jurisdictions did not have crypto-specific bilateral agreements in place. Information sharing occurred through informal channels or not at all. When a CASP operating across multiple jurisdictions was subject to enforcement action, the cooperating regulators often lacked formal legal authority to share confidential supervisory information with each other, impeding coordinated investigation.

This gap has practical consequences. Cross-border crypto fraud and market manipulation require cross-border enforcement. Firms that structure themselves to operate from a permissive jurisdiction while serving clients in more regulated jurisdictions exploit the cooperation gap. The FSB peer review’s identification of cross-border cooperation as the weakest implementation area reflects a structural challenge: information-sharing agreements take years to negotiate and require political will from both sides.

The Eight New Recommendations

In response to the peer review findings, the FSB issued eight supplementary recommendations in October 2025. These addressed the specific gaps the review had identified:

Reserve transparency standards for global stablecoins, requiring monthly public disclosure of reserve asset composition with asset-level detail. Enhanced cross-border cooperation standards, including a model bilateral agreement template for crypto supervisory information sharing. Custody requirements specifying the technical and legal standards for segregation of customer assets. Decentralised finance risk guidance, addressing how FSB recommendations apply to DeFi protocols and their developers or governance participants. Enhanced governance requirements for global stablecoin issuers, including independent directors and audit requirements. Standards for crypto-asset exposure disclosure by regulated financial institutions. Implementation timelines for jurisdictions currently lagging, with differentiated deadlines based on existing framework maturity. A CBDC coordination note, acknowledging the intersection of CBDC development with crypto regulatory frameworks.

What Non-Compliance Means in Practice

The FSB has no formal sanctions mechanism. A jurisdiction that ignores FSB recommendations faces no direct penalty from the FSB itself. The consequences of non-compliance are indirect but real.

Market access: Institutions in non-compliant jurisdictions face reduced access to financial services from regulated institutions in compliant jurisdictions. A crypto exchange regulated in a jurisdiction with no adequate framework will find it harder to obtain correspondent banking, institutional prime brokerage, and custody services from major financial institutions in the EU, US, or Singapore.

Reputational cost: FSB peer review reports are public. A finding of significant implementation gaps is politically and reputationally embarrassing. Finance ministers and central bank governors face questions from parliaments, media, and international counterparts about why their jurisdiction’s framework does not meet agreed standards.

G20 scrutiny: The G20 explicitly monitors FSB implementation progress. Non-compliance by a G20 member creates diplomatic awkwardness at Finance Ministers’ meetings — a low but real cost that accumulates over multiple review cycles.

The FSB framework is, ultimately, a mechanism of coordinated soft power. Its effectiveness depends on the shared interest of major economies in maintaining the financial stability standards that protect all of them — and on the willingness of those economies to apply reputational and market pressure to laggards. The October 2025 peer review, despite its sobering findings, also demonstrates that the mechanism works in the medium term: implementation is advancing, even if unevenly, and the review creates new momentum for progress in the jurisdictions identified as falling short.