The chair of the Financial Stability Board, Andrew Bailey, has told G20 finance ministers and central bank governors that artificial intelligence and global stablecoins both need close watching. His letter is dated 8 October 2026 and was published by the FSB on 12 October, ahead of the ministers’ meeting. The FSB also published a note on stablecoin risks the same day [1][2][3].
CONFIRMED (FSB primary sources).
What the FSB is
The FSB is an international body that brings together national financial authorities, such as central banks and regulators, and the groups that set global standards. It coordinates their work on keeping the financial system stable. Its decisions are not legally binding. Bailey, who is also Governor of the Bank of England, chairs it; its secretariat is in Basel, Switzerland [1].
AI: valuations and cyber threats
Bailey’s letter repeats risks he raised in August, including “risks associated with artificial intelligence (AI), including the potential for a market reassessment of AI-related valuations to trigger a broader market correction, as well as increasingly sophisticated AI-enabled cyber threats to the resilience of critical financial institutions and financial market infrastructures.” [2]
In plain terms: if investors decide AI companies are worth less than thought, falling prices could spread to wider markets. Separately, attackers using AI could target banks and the systems that settle payments and trades.
“AI therefore requires our continued close attention alongside careful management by financial institutions,” he writes [2].
The FSB is submitting its Sound Practices for the Responsible Adoption of AI to the G20. The press release describes them as finalised, after a public consultation [1]. The letter says they are “designed as a toolkit, adaptable to the size, type, and level of AI adoption within financial institutions”, and that they “span organisation-wide AI governance, lifecycle management, cyber risk mitigation, and management of third-party services.” [2]
Stablecoins: rules that do not yet fit together
A stablecoin is a crypto token meant to hold a steady value, usually one US dollar, backed by reserves such as cash and government bonds. Many operate across countries at once.
The letter says that mechanisms for “cross-border oversight, crisis management, accountability and cooperation in stress or insolvency, remain immature or are not yet developed.” It adds: “The interaction of regulatory frameworks across borders remains uncertain or undefined in many jurisdictions, including regarding the treatment of foreign-issued stablecoins.” [2]
The note gives the market’s size: “As of mid-2026, the total market value for stablecoins is around $300 billion, essentially unchanged from a year earlier, with 99 per cent (by value) pegged to the US dollar” [3].
How a run could spread
A run happens when many holders try to swap their stablecoins back for dollars at once, fearing the coin may lose value. To pay them, the issuer must sell its reserves quickly. Selling large amounts in a hurry pushes prices down; this is a fire sale.
The note says a run could spill over into traditional finance through “reserve-asset fire sales and banking deposit withdrawals to fund redemptions”, among other channels [3]. It also flags a risk for stablecoins issued by several linked companies in different countries: if holders can redeem with any of them, “redemption demand could concentrate on a single entity in the group.” [3]
The note sets out further work to improve how authorities monitor these cross-border risks [1].
Sources
- Financial Stability Board, “FSB Chair sets out FSB work on AI and stablecoins”, press release, 12 October 2026. https://www.fsb.org/2026/10/fsb-chair-sets-out-fsb-work-on-ai-and-stablecoins/
- Financial Stability Board, “FSB Chair’s letter to G20 Finance Ministers and Central Bank Governors: October 2026”, letter dated 8 October 2026, published 12 October 2026. https://www.fsb.org/2026/10/fsb-chairs-letter-to-g20-finance-ministers-and-central-bank-governors-october-2026/ (PDF: https://www.fsb.org/uploads/P121026-1.pdf)
- Financial Stability Board, “Global Stablecoin Arrangements: Cross-border vulnerabilities and financial stability monitoring”, 12 October 2026. https://www.fsb.org/2026/10/global-stablecoin-arrangements-cross-border-vulnerabilities-and-financial-stability-monitoring/ (PDF: https://www.fsb.org/uploads/P121026-2.pdf)
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