The crypto sector has been freed from its annual benchmark in the litany of financial risks posed to the US system by the Financial Stability Oversight Council, although it is not unique in this, as the report effectively removed much of the focus on “vulnerabilities” in the financial system.
The FSOC, created after the 2008 mortgage meltdown that sent the global economy into a tailspin, was meant to be an early warning effort in which the council of regulators collectively attempts to spot coming dangers. The digital assets industry has appeared on this list every year, although the reports always highlight the still limited size of the market while suggesting that products such as stablecoins and exchange-traded funds could pose risks if the space becomes too interconnected with the rest of the financial system. It’s no longer an explicit concern in the 2025 report released Thursday by President Donald Trump’s regulators.
The document’s table of contents entirely erased the once-ubiquitous word “vulnerabilities,” and Treasury Secretary Scott Bessent acknowledged in the report’s opening letter that analysis has historically focused on identifying dangers that could disrupt the financial system.
“But monitoring and addressing these vulnerabilities, while important, is not enough to safeguard financial stability,” he argued. “Financial stability also requires, and is interdependent with, long-term sustainable economic growth and economic security.”
The 2024 report, a 140-page document written under the watch of regulators from former President Joe Biden’s administration, had primarily focused its recommendations on digital assets on urging Congress to regulate stablecoins and impose specific regulation on spot markets. This year’s shorter 87-page report does not include “recommendations” on digital assets or flag explicit concerns about the industry.
In the section on digital assets, it has a “Additional Actions” subsection that references this year’s President’s Task Force Report on U.S. Crypto Activity and the Administration’s agenda, noting that the previous report “contains recommendations to Congress and various government agencies, including certain council member agencies, to enable U.S. innovation and leadership in digital financial technology.”
The digital assets sections of the FSOC 2025 report detail how U.S. financial regulators with a say in crypto matters have retreated from their previous policy stance in which they generally warned regulated financial companies about the risks of getting involved in the industry and sometimes obstructed them. He mainly praises the strengths of the growing sector, although he notes in the “Illicit Financing” subsection that stablecoins can be “misused to facilitate illicit financial transactions.”
However, he also said that “the continued use of US dollar-denominated stablecoins is expected to support the role of the US dollar in the international financial system over the next decade.”
Read more: FSOC Still Concerned About Stablecoins
