In a recent interview with The Sunday Times, Bank of England (BOE) governor Andrew Bailey expressed his concerns about banks issuing stablecoins, suggesting that the BOE should focus on tokenizing deposits instead.
According to the esteemed official, stablecoins introduce systemic risks to banking institutions that could destabilize the entire financial system, causing sovereign governments to lose control over their currencies. Quite the drama, wouldn’t you say? 😱
Bailey, the new chairman of the Financial Stability Board (FSB), an international financial regulator, will undoubtedly clamp down on the proliferation of stablecoins during his tenure. We can only imagine the suspenseful showdowns that await us! 🤠
Stablecoins, one of the biggest sectors in crypto, can help increase the geographic salability of fiat currencies by bringing payment rails onchain, obviating the need for robust banking infrastructure to transmit funds across borders. This democratizes access to major currencies such as the US dollar, euro, and Japanese yen. Quite the revolutionary idea, wouldn’t you agree? 🚀
The United States goes all-in on stablecoins under the Trump administration
The Trump administration has repeatedly said that establishing comprehensive stablecoin regulations in the United States is a top priority. US Treasury Secretary Scott Bessent said that stablecoins would extend US dollar dominance, ensuring that the dollar remains the global reserve currency. Quite the power move, wouldn’t you say? 💰
Overcollateralized stablecoin issuers back their digital fiat tokens with cash held in banking institutions or short-term US Treasury bills, which are highly liquid. By allowing private companies to tokenize US debt instruments, the administration can relieve some of the inflationary pressure on the dollar by spreading demand for US debt instruments to anyone with a cellphone and a crypto wallet. Quite the ingenious plan, wouldn’t you say? 💡
Federal Reserve chairman Jerome Powell has also voiced support for the idea and called for cohesive stablecoin policies in the United States. However, European counterparts have repeatedly sounded the alarm on the United States’ stablecoin plans, warning that dollar-denominated stablecoins pose a threat to the EU financial system and could displace the euro altogether. Quite the clash of titans, wouldn’t you say? 🏛️
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2025-07-14 01:35