As global banks and financial institutions rush to lay out stablecoins, Bank of England Governor Andrew Bailey publicly urged major global banks 'not to issue their own stablecoins' and warned that stablecoins could pose a threat to 'financial stability' and the 'nature of money.'
Andrew Bailey pointed out in an interview with The Times that rather than hastily embracing private stablecoins or rashly promoting central bank digital currencies (CBDCs), central banks should prioritize 'tokenized deposits', which are digital versions of traditional currency. He said:
I would prefer banks to choose the path of 'tokenized deposits' and seriously consider how to digitize our currency, especially in payment scenarios.
Andrew Bailey also serves as the chair of the Financial Stability Board (FSB), established after the 2008 financial crisis. In an interview, he expressed a consistent cautious attitude towards Bitcoin, reminding investors not to blindly chase prices:
It (Bitcoin) is not money and does not possess the functions of money. If you insist on buying it, please keep your eyes wide open.
In fact, Andrew Bailey's remarks came at a time when Bitcoin was surging. According to CoinGecko data, Bitcoin soared to $119,367 this morning (14th), setting a new historical high.
Meanwhile, the U.S. Congress is about to welcome 'Crypto Week', during which several cryptocurrency bills will be reviewed. Observers expect both houses to focus on the stablecoin regulatory bill (GENIUS Act), which aims to provide banks and private enterprises with a legal basis for issuing stablecoins. On the other hand, the House of Representatives will also discuss a broader cryptocurrency market regulatory bill, as well as a bill to block the Federal Reserve from issuing a CBDC.
'The direction of the U.S. is clear, moving towards the development of stablecoins; the European Central Bank is betting on CBDCs, but neither side is seriously considering tokenized deposits,' Andrew Bailey pointed out the current policy divergence among countries.
Andrew Bailey has always been highly cautious about cryptocurrencies. In his speech at the University of Chicago Booth School of Business in London this February, he bluntly stated that 'non-stablecoin crypto assets' are merely an investment risk game.
As for stablecoins, Andrew Bailey expressed support for stricter regulation: 'I believe that regulations regarding stablecoins must be set high enough because once they are used as payment tools, societal expectations of them will be no different from those of money.'
"Bank of England Governor Andrew Bailey criticizes stablecoins: they should not be issued by banks and could threaten financial stability" was first published by Blockcast.
