- Financial Stability Board (FSB) says cross-border stablecoin oversight and crisis management frameworks remain immature.
- Only 11 of 28 surveyed jurisdictions have finalized stablecoin regulatory frameworks.
- Stablecoin runs could spill into traditional markets through forced asset sales and bank deposit withdrawals.
- The FSB finalized AI adoption practices covering governance, Cybersecurity, and third-party risks.
- AI-enabled cyber threats could undermine the resilience of critical financial institutions.
The Financial Stability Board (FSB) warned global policymakers Monday in a letter that cross-border mechanisms for stablecoin oversight and crisis management “remain immature or are not yet developed.” The letter was submitted to Group of Twenty (G20) finance ministers and central bank governors ahead of their Thursday meeting.
The FSB’s 2025 review found that 11 of 28 surveyed jurisdictions had finalized stablecoin regulatory frameworks. FSB Chair Andrew Bailey urged G20 members to support the board’s newly finalized practices for responsible AI adoption in the financial sector.
“AI therefore requires our continued close attention alongside careful management by financial institutions,” Bailey wrote. In a report accompanying the letter, the FSB warned that stablecoin runs could spill into traditional markets through forced sales of reserve assets and withdrawals of bank deposits.
The watchdog also identified risks for multi-issuer stablecoins, where redemption demand could concentrate on one issuer while reserves are held in different jurisdictions. These concerns echo a 2025 warning from European Central Bank President Christine Lagarde about similar redemption risks involving stablecoins issued inside and outside the European Union.
The FSB’s AI practices cover organization-wide governance, AI development and deployment, cybersecurity and third-party service risks. Bailey warned that sophisticated cyber threats enabled by AI could undermine the resilience of critical financial institutions and market infrastructure.
In July, European central bankers warned that advances in AI could amplify market volatility and cybersecurity threats. In June, the FSB proposed 12 practices for responsible AI adoption before finalizing its guidance for the upcoming G20 meeting.
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