US EditionAndrew Bailey Slams Bank Stablecoins, Contrasts With Trump’s Pro-Crypto Wave: The Times
GREATER LONDON, ENGLAND, JUL 14 – Bank of England Governor Andrew Bailey cautions UK banks against stablecoin issuance due to risks to financial stability and monetary control amid a $240 billion global market surge.
- The head of the Bank of England cautioned financial institutions against issuing their own stablecoins, citing concerns over potential threats to financial stability and the fundamental functions of the banking system.
- Bailey’s caution contrasts with the U.S. which, under Treasury Secretary Scott Bessent and the Genius Act proposal, supports stablecoin issuance by commercial banks.
- Bailey encourages banks to adopt digitized versions of traditional commercial bank deposits as a more secure approach to digital finance that maintains the integrity of credit creation and allows for effective monetary policy management.
- Bailey emphasized that when funds move out of the banking system, it reduces the amount banks can provide as loans, expressing concern that stablecoins might cause such a withdrawal of deposits and hinder lending.
- This divide reflects global regulatory variation, with the UK’s restrictive approach potentially limiting innovation and London’s chance to lead stablecoin markets.
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BoE Governor Andrew Bailey Cautions Banks On Stablecoins
Andrew Bailey, the Governor of the Bank of England (BoE) and the Chair of the Financial Stability Board, has given large banks a very clear warning about the dangers of creating their own stablecoins. Bailey recently said that stablecoins could be a threat to financial stability and told banks to focus on tokenised deposits as a safer way to integrate digital finance. This position puts the UK at odds with the US’s pro-stablecoin regulations, wh…
Andrew Bailey advocated against banks issuing their own digital currencies pegged to traditional currencies.
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