FSB warns G20 on stablecoin oversight gaps and AI threats
The Financial Stability Board sent a letter before a G20 meeting of finance ministers and central bank governors, cautioning that stablecoin regulation and cross-border crisis plans are underdeveloped. It said a stablecoin run could spill into traditional markets as issuers sell reserves and users pull bank deposits. The FSB also asked G20 members to back its finalized guidance for responsible AI use in finance, citing governance, cybersecurity, and third-party risks.
The FSB's letter, published Monday, precedes a Thursday gathering of G20 finance ministers and central bank governors. Chair Andrew Bailey said cross-border stablecoin supervision and crisis planning are immature or undeveloped. A 2025 review found only 11 of 28 surveyed jurisdictions had completed stablecoin rules, and differing national approaches could hinder coordinated responses.
The accompanying report outlined how a stablecoin run might force reserve sales and bank deposit withdrawals. It also flagged multi-issuer arrangements, where redemptions may cluster at one issuer even as reserves sit in multiple jurisdictions. Separately, Bailey backed finalized AI guidance covering governance, deployment, cybersecurity and outside technology providers; the FSB had proposed 12 practices in June.
If stablecoin oversight gaps persist, a run could affect holders, issuers, banks and ordinary savers through reserve sales or deposit withdrawals. Cross-border coordination failures may amplify disruptions. The AI guidance could shape how financial firms manage governance, cyber and vendor risks, potentially affecting customers and market stability. G20 backing may encourage more consistent safeguards, though implementation and timing remain uncertain.