FSB Chair sets out FSB work on AI and stablecoins
Andrew Bailey delivers note on vulnerabilities and monitoring of global stablecoins and finalised sound practices on AI adoption.
Source: Financial Stability Board · October 13, 2026 at 4:31 AM · AI-assisted report
Single-source
BASEL, SWITZERLAND, 13 OCTOBER 2026 —
The Financial Stability Board (FSB) has outlined its priorities for monitoring global stablecoins and artificial intelligence (AI) risks ahead of the G20 Finance Ministers and Central Bank Governors meeting on 15 October, in a letter from its Chair, Andrew Bailey, Governor of the Bank of England.
Market Impact
The move underscores growing concerns over financial stability vulnerabilities linked to AI adoption and the rapid expansion of global stablecoin arrangements, which Bailey’s letter flags as key areas requiring closer international coordination. The FSB’s accompanying note details ongoing efforts to assess and mitigate risks, including cross-border exposures and the implementation of its 2023 recommendations on stablecoins—work that will now focus on enhancing data-sharing and regulatory cooperation.
Bailey’s letter, addressed to G20 leaders, highlights three major threats to the global financial system: heightened volatility in sovereign bond markets, vulnerabilities in private credit markets, and risks from AI. The FSB’s note on stablecoins—published alongside the letter—summarises its financial stability monitoring framework for these digital assets, which now includes cross-border vulnerability tracking and support for authorities in adopting the 2023 G20 stablecoin reforms.
The FSB also confirmed that it will review the implementation of G20 financial sector reforms in 2025 under the South African G20 Presidency, with a working group led by Randal K. Quarles, former FSB Chair and ex-Vice Chair for Supervision at the Federal Reserve.
The FSB, which coordinates global financial regulatory efforts among 24 jurisdictions—including major economies like the U.S., EU, and Japan—has expanded its outreach to 70 additional jurisdictions via its six Regional Consultative Groups. Its Secretariat, based in Basel, Switzerland and hosted by the Bank for International Settlements, will lead the monitoring efforts, building on its mandate to develop and promote regulatory policies for financial stability.
For Malaysia, the FSB’s focus on stablecoin risks and AI governance carries direct implications, given the country’s growing digital economy and its role as a regional financial hub. The Bank Negara Malaysia (BNM)—a member of the FSB—will likely align with the board’s recommendations, particularly on cross-border stablecoin monitoring, which could impact Malaysia’s fintech sector and crypto regulations.
Meanwhile, the FSB’s AI risk assessment may influence BNM’s approach to financial sector AI adoption, including potential safeguards for algorithmic trading and AI-driven lending.
The next steps for the FSB include fostering cross-border cooperation on stablecoin oversight and finalising sound practices for AI adoption in financial services, with further updates expected ahead of the G20 meeting in October. Bailey’s letter signals that these issues will remain central to global financial stability discussions in the coming months.
Related: Bank Negara Malaysia · Bank for International Settlements · Andrew Bailey · Basel, Switzerland