BOE’s Bailey Takes Aim at Stablecoins, Calls Them a Threat to Financial Stability

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Andrew Bailey, Governor of the Bank of England, has raised strong objections against private stablecoins, labeling them a potential danger to the banking sector and sovereign monetary control.

Speaking to The Sunday Times, Bailey argued that stablecoins could introduce systemic vulnerabilities, destabilizing financial systems worldwide. He dismissed the idea of a UK CBDC, instead advocating for the tokenization of existing bank deposits.

Given his new role as head of the Financial Stability Board (FSB), Bailey’s comments suggest a forthcoming crackdown on stablecoin adoption—a move that could stifle innovation in a sector that has revolutionized cross-border payments.

Stablecoins, a dominant force in crypto, enable seamless global transactions by bypassing traditional banking systems, granting millions access to stable assets like the US dollar and euro. Bailey’s opposition, however, indicates a looming regulatory clash between central banks and the decentralized finance (DeFi) ecosystem.