Global Watchdog Flags Stablecoin Risks and AI Threats Ahead of G20

The Financial Stability Board has raised concerns about financial stability risks tied to artificial intelligence and stablecoins in a letter to G20 finance ministers ahead of their Thursday meeting.

FSB Chair Andrew Bailey warned that cross border mechanisms for stablecoin oversight and crisis management remain immature or undeveloped. A 2025 review found that only 11 of 28 surveyed jurisdictions had finalized stablecoin frameworks.

Stablecoin Runs Could Hit Traditional Markets

In an accompanying report, the FSB said stablecoin runs could spill into traditional markets through forced sales of reserve assets and withdrawals of bank deposits. It also flagged risks for multi issuer stablecoins, where redemption demand could concentrate on one issuer while reserves sit in different jurisdictions.

The concerns echo earlier warnings from ECB President Christine Lagarde about redemption risks involving stablecoins issued inside and outside the European Union.

New AI Practices Target Cybersecurity Risks

Bailey urged G20 members to back the FSB’s newly finalized practices for responsible AI adoption, which cover governance, development, cybersecurity and third party risks. He warned that AI enabled cyber threats could undermine the resilience of critical financial institutions.

In July, European central bankers similarly warned that AI advances could amplify market volatility and cyber threats.

The FSB proposed 12 AI practices in June before finalizing guidance for the G20 meeting.