The crypto sector has been freed from its annual reference in the Financial Stability Oversight Council’s litany of financial risks posed by the US system, although it is not unique in that, because the report has effectively removed much of its focus on financial system “vulnerabilities”.
The FSOC, created after the 2008 mortgage meltdown that crashed the global economy, was meant as an early warning effort, where the council of regulatory chiefs jointly tries to spot dangers coming down the road. The digital asset industry was an annual item on the list, although the reports always noted the still limited market size, while suggesting that products such as stablecoins and exchange-traded funds could pose risks if the space became too connected to the rest of the financial system. It is no longer an explicit concern in the 2025 report released Thursday by President Donald Trump’s regulators.
The document’s table of contents has completely deleted the once-ubiquitous word “vulnerabilities,” and Treasury Secretary Scott Bessent acknowledged in the report’s opening letter that the analysis historically focused on identifying dangers that could disrupt the financial system.
“However, monitoring and addressing these vulnerabilities, while important, are not sufficient to ensure financial stability,” he argued. “Financial stability also requires and is interdependent on sustainable long-term economic growth and economic security.”
The 2024 report, a 140-page document written under the watch of regulators in the administration of former President Joe Biden, had mostly focused its digital assets recommendations on nudging Congress to regulate stablecoins and assign specific regulation to the spot markets. This year’s shorter 87-page report does not include “recommendations” for digital assets or flag explicit concerns about the industry.
Under the digital assets section, it has a “further actions” subsection that references this year’s President’s Task Force report on US crypto activity and the administration’s agenda, noting that earlier report “includes recommendations to Congress and various government agencies, including certain council member agencies, to enable innovation and US leadership in digital financial technology.”
The 2025 FSOC report’s section on digital assets described how U.S. financial regulators with influence on crypto issues reversed their previous policy stance, in which they generally warned regulated financial firms of the risks of getting involved in the industry and sometimes stood in the way. It mostly praises the strengths of the growing sector, although it notes in the “illicit financing” subsection that stablecoins can be “misused to facilitate illicit financing transactions.”
But it 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
