Bank of England chief rejects private stablecoin plans
Andrew Bailey has warned that private stablecoins could undermine financial stability and called for tokenised deposits instead.
Bank of England Governor Andrew Bailey has expressed strong opposition to private banks issuing stablecoins, warning they could introduce systemic risks and erode monetary sovereignty.
In an interview with The Sunday Times, Bailey said the UK should focus instead on tokenising bank deposits. He argued against creating a central bank digital currency or supporting private stablecoin issuers.
Bailey, who now chairs the international Financial Stability Board, is expected to advocate for stricter controls on the global expansion of stablecoins. He argued that widespread adoption of such tokens could weaken national currencies and destabilise financial systems.
While the UK and other European nations are taking a cautious approach, the United States has fully embraced stablecoins under the Trump administration. US officials say stablecoins could boost dollar influence by making debt instruments accessible through digital wallets.
European policymakers remain concerned that dollar-based stablecoins could displace the euro in cross-border trade, threatening financial stability across the continent. The debate highlights a growing divide between the US and Europe over the future of digital finance.
Would you like to learn more about AI, tech and digital diplomacy? If so, ask our Diplo chatbot!
