FSB Warns of Stablecoin, AI Risks Ahead of G20 Meeting
Summary
- The FSB said gaps in stablecoin regulation and threats tied to artificial intelligence (AI) are major financial risks.
- The FSB said only 11 of 28 jurisdictions in its review had completed stablecoin regulatory frameworks, and warned that risks could spread to traditional financial markets in the event of large-scale redemptions.
- The FSB said it has finalized AI guidance covering governance, cybersecurity, and risks tied to third-party service providers.
Forecast Trend Report by Period
The Financial Stability Board flagged gaps in stablecoin regulation and threats tied to artificial intelligence as key financial risks ahead of a Group of 20 meeting of finance ministers and central bank governors.
Cointelegraph reported on October 12 that FSB Chair Andrew Bailey, in a letter released that day, warned that cross-border oversight and crisis-management frameworks for stablecoins remain underdeveloped or are not yet in place. In the FSB's 2025 review of 28 jurisdictions, only 11 had completed stablecoin regulatory frameworks.
In a report released alongside the letter, the FSB said a wave of large-scale stablecoin redemptions could spill into traditional financial markets through forced sales of reserve assets and withdrawals of bank deposits. It also said stablecoins involving multiple issuers pose added risks because redemption demand could be concentrated on one issuer while reserve assets are spread across several jurisdictions.
Bailey also cautioned on AI-related risks, saying the technology requires prudent management by financial institutions and sustained close attention. The FSB said AI could enable more sophisticated cyberattacks and threaten the stability of critical financial institutions and market infrastructure. Its finalized AI guidance covers enterprise-wide governance, AI development and deployment, cybersecurity, and risks tied to third-party service providers.
The FSB submitted the letter ahead of the G20 finance ministers and central bank governors meeting scheduled for Thursday.
