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FSB Warns Cross-Border Stablecoin Rules Remain Untested in a Severe Market Crisis
The watchdog said stablecoin oversight remains immature and warned that AI-enabled cyber threats could undermine critical financial institutions and market infrastructure.
On Monday, Financial Stability Board Chair Andrew Bailey warned G20 finance ministers that cross-border mechanisms for stablecoin oversight and crisis management remain immature ahead of their Thursday meeting.
The Financial Stability Board's 2025 review found only 11 of 28 surveyed jurisdictions had finalized stablecoin regulatory frameworks, while regulators warned runs could spill into traditional markets through forced reserve asset sales.
Bailey finalized new practices for responsible AI adoption targeting cybersecurity and third-party risks, warning that sophisticated AI-enabled cyber threats could undermine the resilience of critical financial institutions.
In 2025, European Central Bank President Christine Lagarde warned of similar redemption risks for stablecoins issued inside and outside the European Union, echoing concerns about AI-amplified volatility.
The G20 coordinates global financial policy as Korea's $450B crypto economy grows, with the Financial Stability Board urging members to adopt finalized AI and stablecoin safeguards.
A review of the FSB found that 11 jurisdictions had completed comprehensive frameworks for cryptoactive activities, but only five had done so for stablecoins. The entity also consults practices for responsible adoption of AI and warns about cybersecurity risks.