The Governor of the Bank of England (BoE), Andrew Bailey, has issued a cautionary statement against the issuance of private stablecoins, emphasizing that financial institutions should prioritize the tokenization of traditional deposits.
In a recent interview with The Sunday Times, Bailey highlighted the systemic risks posed by stablecoins and warned that their widespread adoption could undermine monetary sovereignty and destabilize the financial system as a whole.
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He also stated the British central bank should refrain from introducing a central bank digital currency (CBDC) or any state-controlled digital fiat alternative.
As the new chair of the Financial Stability Board (FSB), Bailey's stance points to a possible tightening of regulations on stablecoins in the coming years.