BIS warns stablecoin group structures evade activity limits as US charters expand

The Bank for International Settlements’ Financial Stability Institute (FSI) published a comparative brief this week examining stablecoin issuance rules across the European Union, Hong Kong, Singapore, the United Kingdom, and the United States, with a central finding that activity restrictions attach to the issuing entity alone rather than to the corporate group surrounding it.

The FSI’s concern is structural: where affiliates of a nonbank stablecoin issuer conduct lending, staking, or custody, the conflicts of interest and contagion risks that activity restrictions are designed to contain can migrate to those affiliates without triggering group-wide oversight. The authors note explicitly that as a group’s size grows, so do those risks and their potential financial stability implications. A concrete illustration the brief raises is whether losses at a lending or custody affiliate could be enough to precipitate a run on the issuer itself.

The Ledger Insights analysis accompanying the FSI findings points to a parallel dynamic in the United States, where group structuring already appears to be standard practice among stablecoin issuers and where the Office of the Comptroller of the Currency (OCC) is interpreting the permissible activities under the GENIUS Act broadly in its trust charter approvals. That combination, regulators watching the issuer entity while the group builds out around it, is precisely the configuration the FSI brief flags as the emerging fault line.