FSB warns of stablecoin, AI risks ahead of G20 meeting

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FSB warns of stablecoin, AI risks

Highlights

FSB Chair Andrew Bailey urges G20 members to address cross-border gaps in stablecoin oversight and adopt new AI risk management practices in the financial sector.
FSB report warns a stablecoin run could trigger forced sales of reserve assets and bank deposit withdrawals, spreading stress to traditional financial markets.
FSB highlights AI-driven cyber threats and volatility risks, emphasizing that only 11 of 28 jurisdictions have finalized stablecoin regulatory frameworks as of its 2025 review.

Warnings to G20 on oversight gaps

As reported by Cointelegraph, citing the Financial Stability Board, Chair Andrew Bailey says cross-border arrangements for stablecoin oversight and crisis management remain underdeveloped or have not yet been created. In a letter published Monday ahead of Thursday’s meeting of G20 finance ministers and central bank governors, he urges members to back the watchdog’s newly finalized practices for responsible AI adoption in the financial sector.

The FSB says its 2025 review finds that 11 of 28 surveyed jurisdictions have finalized stablecoin regulatory frameworks. Bailey writes that AI requires continued close attention and careful management by financial institutions as adoption expands across the sector.

Spillover concerns for broader markets

An accompanying FSB report says a run on stablecoins could spread stress into traditional markets through forced sales of reserve assets and withdrawals of bank deposits. The watchdog also highlights risks in multi-issuer stablecoin structures, where redemption pressure could concentrate on one issuer while reserves are held across different jurisdictions.

Those concerns mirror earlier warnings from other regulators. In 2025, European Central Bank President Christine Lagarde warned of similar redemption risks involving stablecoins issued inside and outside the European Union, while European central bankers said in July that advances in AI could intensify market volatility and cybersecurity threats.

The FSB’s final AI practices cover organization-wide governance, AI development and deployment, cybersecurity, and risks linked to third-party service providers. Bailey also warns that more sophisticated cyber threats enabled by AI could weaken the resilience of critical financial institutions and market infrastructure.

Our earlier coverage examined how investors are increasingly scrutinizing AI hyperscalers’ financing as data-center expansion creates large, often opaque off-balance-sheet lease obligations. Using Meta as a key example, it highlighted how uncommenced lease commitments can materially reshape leverage expectations and help explain wider credit spreads despite relatively strong headline balance sheets.

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