Bank of England Governor Andrew Bailey warned the global investing banks against developing their own stabecoin, highlighting the potential threats to financial stability.
Speaking in an interview Along with the Times, Bailey took a stand that supports the rapid crypto initiative with the support of US President Donald Trump’s administration, which has given air to the expectations of a friendly regulatory climate in the country.
Bailey expressed doubts about stablecoins, which are digital tokens tied to traditional assets like dollars. He argued that StableCoins do not take the same safety measures as traditional bank deposits and remove money from the banking system, possibly credits construction and monetary policy control.
“Stablecoins are proposed for money characteristics,” Belly said. “He is a medium of money exchange. Therefore, they really have the features of money and they have to maintain their nominal value. We have to look at it very closely through that lens. It is a financial stability issue and a penny issue in that sense.”
Instead, they encouraged banks to find out the deposits, which digitize the existing forms by keeping them strongly under the regulatory inspection. Belly indicated that UK Digital Banking may be better than increasing the central bank digital currency. (CBDC)As the European Central Bank plans to do in the coming years.
His warning reaches the same way as the US Congress considers the Genius Act, a proposal to release stabechoin to commercial banks. Institutions such as JPMorgan and CITI are reportedly preparing for such steps, which are expecting an increase in digital finance under the luxury rules. The cryptocurrency value like bitcoin has increased in the largest economy of the word amid speculation over more liberal policies.
