Cryptocurrency may be nearing the point where it poses a systemic risk to the global financial system, according to Klaas Knot, outgoing chair of the Financial Stability Board (FSB). Speaking in Spain, Knot acknowledged that despite previous disruptions in the crypto space—including bankruptcies, liquidity issues, and fraud—the FSB had not considered the sector a systemic threat until now.

However, Knot warned that recent trends, such as increased retail participation and deeper integration with traditional finance, may indicate a shift. He highlighted the role of stablecoin issuers, noting their growing holdings in U.S. Treasuries as a development worth close attention. These trends, he said, suggest the sector is approaching a “tipping point” where its influence could ripple more broadly across the financial system.

Given the cross-border nature of crypto, Knot emphasized the importance of coordinated global regulation. He pointed to the FSB’s recommendations as a shared starting point for regulators developing oversight frameworks. In response, Nick Jones, CEO of digital asset platform Zumo, offered a different perspective, arguing that crypto—especially stablecoins—can enhance financial resilience through efficiency, faster transactions, and robust security backed by cryptography.