FSB Warns G20 of Stablecoin and Artificial Intelligence Risks in Letter Published Monday

A Letter Addressed to the G20

The Financial Stability Board (FSB), the international financial oversight body, has detailed the risks that artificial intelligence and certain aspects of stablecoins pose to financial stability, Cointelegraph reports. In a letter published Monday, its chair, Andrew Bailey, calls on G20 officials to support stronger safeguards.

The letter was sent to G20 finance ministers and central bank governors ahead of their meeting on Thursday. According to Cointelegraph, the G20 brings together the world's major economies to coordinate priorities in financial policy and regulation.

Stablecoins Still Poorly Regulated on an International Scale

In the letter, Andrew Bailey warns that cross-border mechanisms for stablecoin supervision and crisis management "remain immature" or are not yet developed, according to Cointelegraph. In its 2025 review, the FSB found that 11 of the 28 jurisdictions surveyed had finalized a regulatory framework for these assets.

A report accompanying the letter warns of a run scenario: mass redemptions of stablecoins could spread to traditional markets through forced sales of reserve assets and withdrawals of bank deposits. The FSB also identifies a risk specific to multi-issuer stablecoins: redemption demands could concentrate on a single issuer, while reserves are held across different jurisdictions.

An Echo of Earlier Warnings

Cointelegraph notes that these concerns echo those already voiced by regulators. In 2025, European Central Bank President Christine Lagarde raised comparable redemption risks for stablecoins issued inside and outside the European Union.

AI: Finalized Practices and Cyber Risk

Andrew Bailey also urges G20 members to back the practices the FSB has just finalized for the responsible adoption of AI in the financial sector. They cover organization-wide governance, AI development and deployment, cybersecurity, and risks related to third-party providers. In June, the FSB had proposed 12 practices before finalizing its recommendations for the upcoming G20 meeting.

Andrew Bailey warned that sophisticated cyber threats enabled by AI could weaken the resilience of critical financial institutions and market infrastructure. He wrote that AI requires sustained attention, as well as careful management by financial institutions, according to Cointelegraph.

Analysis

Based solely on the information reported by Cointelegraph, the FSB's message combines two priorities: completing national frameworks, which remain partial for stablecoins, and coordination among jurisdictions, which it considers insufficient. Cointelegraph also recalls that AI risks had already drawn the attention of European central bankers in July, who pointed to a possible amplification of market volatility and cyber threats. The article does not specify how the G20 will follow up on these requests.