The global stablecoin market has swollen to roughly $300 billion, yet only 11 of 28 major jurisdictions have finished writing rules for it. That's the warning Andrew Bailey — Bank of England governor and chair of the Financial Stability Board, the body that coordinates financial regulators across the G20 — sent to finance ministers and central bank governors this week.
Bailey released a new report on cross-border stablecoin vulnerabilities two days ahead of the G20 finance ministers' meeting on October 15. Its conclusion is blunt: if a major stablecoin faces a run, the shock could spill into mainstream finance through forced sales of reserve assets and sudden withdrawals of bank deposits. Multi-issuer stablecoins carry an extra wrinkle — redemption demand can pile up against one issuer while the reserves backing the token sit in a different country entirely.
The trouble isn't the tokens themselves so much as where oversight stops. Ninety-nine percent of stablecoins track the dollar, but they're issued and traded across dozens of jurisdictions with wildly different reserve and disclosure standards. The FSB's own words are stark: cross-border coordination between regulators "remains immature or is not yet developed" — meaning that if a real crisis hits, there's barely a phone tree to call.
The letter's second half turns to artificial intelligence. The FSB finished its Sound Practices for the Responsible Adoption of AI, covering everything from model governance to cybersecurity and third-party vendor risk. Bailey went further, warning that AI-enabled cyberattacks could undermine the resilience of systemically important financial institutions — treating it not as a distant hypothetical but as a live planning assumption for 2027.
None of this creates binding rules on its own; the FSB can only recommend, and the US, EU and UK have already picked different paths for regulating stablecoins. That divergence in speed and approach is, in Bailey's telling, the real risk — some countries are fine-tuning reserve requirements while others are just starting the conversation.
