Assurance Gap

Notes

The President's Working Group on Financial Markets identified the structural feature in 2021: stablecoin oversight is "inconsistent and fragmented, with some stablecoins effectively falling outside the regulatory perimeter."¹ The Financial Stability Board identified the same feature again in 2025, finding "significant gaps and inconsistencies" in the implementation of its global stablecoin recommendations and warning that fragmented oversight creates opportunities for regulatory arbitrage.² Each of these findings describes the symptom. The Assurance Gap names the underlying structural condition that produces it.

The gap exists in three dimensions simultaneously. Across components, no authority assesses the issuer, custodian, validator set, oracle network, and redemption pathway as a single integrated system. Across jurisdictions, no authority renders a determination that binds across the legal regimes a tokenized settlement actually traverses. Across trust regimes, no authority bridges the supervisory frameworks built for regulated institutions and the operational realities of infrastructure that includes unregulated participants. Closing the gap requires an institution whose mandate is precisely this composition — not a deeper regulator, a broader supervisor, or a more sophisticated auditor, but a different kind of authority.