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Governor Bank of England Andrew Bailey warned global investment banks against the development of his own stablecoins, emphasizing possible threats for financial stability.
Talk in an interview At a time when Bailey took an attitude that contrasts sharply with the support of US President Donald Trump for a crypto initiative, which caused the expectations of the more friendly regulatory climate in the country.
Bailey expressed skepticism about the stablecoins that are digital tokens bound to traditional assets Like a dollar. He claimed that stablecoins did not have the same guarantees as conventional banking deposits and could sip the money from the banking system, which potentially weakened loans and monetary policy control.
“Stablecoins is proposed to have money properties,” Bailey said. “This money is the medium of exchange. Therefore, it must really have the characteristics of money and have to maintain its nominal value. We will look at it very carefully through this lens. It is a problem with financial stability and a problem in this sense.”
Instead, he encouraged banks to explore the tokenized deposits that digitize existing forms of money while maintaining them firmly under regulatory supervision. Bailey indicated that the United Kingdom could be better to strengthen the infrastructure of digital banking than to launch and Digital Currency Central Bank (CBDC)How the European Central Bank plans to do in the coming years.
Its warning arrives just like the US Congress is considering Genius Acta proposal for commercial banks to issue stablecoins. Institutions such as JPMorgan and Citi are reportedly preparing for such movements and predict the increase in digital financing according to looser rules. Cryptocurrencies, such as Bitcoins, increased in speculation over milder politics in the greatest economy of the word.
