FSB flags stablecoin and AI risks ahead of G20 meeting

The Financial Stability Board issued the warning in a letter published Monday ahead of a Thursday meeting of G20 finance ministers and central bank governors. FSB Chair Andrew Bailey wrote that cross-border arrangements for stablecoin oversight and crisis management “remain immature or are not yet developed.”

The FSB’s 2025 review found that 11 of 28 surveyed jurisdictions had finalized stablecoin regulatory frameworks. The watchdog reported that differences between national rules could make it harder for authorities to respond to a crisis involving stablecoins operating across several countries.

A report accompanying the letter described how a stablecoin run could affect traditional markets. Issuers might be forced to sell reserve assets, while users could withdraw deposits from banks. The report also identified risks involving multi-issuer stablecoins, where redemption requests could be concentrated at one issuer while reserves are held in different jurisdictions.

Bailey urged G20 members to support the FSB’s finalized practices for responsible artificial intelligence use in finance. The guidance covers governance, AI development and deployment, cybersecurity and risks involving outside technology providers.

“AI therefore requires our continued close attention alongside careful management by financial institutions,” Bailey wrote. He warned that advanced cyber threats supported by AI could weaken critical financial institutions and market infrastructure.

The FSB proposed 12 practices for responsible AI adoption in June and finalized the guidance before the G20 meeting. European central bankers warned in July that AI advances could increase market volatility and cybersecurity risks.

The FSB’s stablecoin concerns follow earlier warnings from regulators. In 2025, European Central Bank President Christine Lagarde highlighted redemption risks involving stablecoins issued inside and outside the European Union.