The Bank of England firmly opposes large banks entering the stablecoin space

Bank of England Clearly States Position on Banks Involvement in Stablecoins

The Governor of the Bank of England, Andrew Bailey, recently issued a warning to financial institutions engaging in stablecoin activities, suggesting that this form of cryptocurrency could undermine the operational logic of the current banking system. He advocated for the ideal path in digital finance to be the promotion of "tokenized" forms of traditional currency, in order to maintain the pivotal role of existing financial intermediaries in financing mechanisms, rather than banks spontaneously issuing stablecoins.

This statement not only reflects a cautious attitude towards technological innovation but also indicates that UK regulators prefer a cautious balance in digital finance policy, avoiding a rapid departure from traditional systems.

Capital Outflow Risk Becomes Major Concern

Bailey's opposition to banks' involvement in stablecoins primarily stems from concerns about the stability of the banking system. The emergence of stablecoins could lead customers to divert funds originally held in banks towards cryptocurrencies issued by non-banking institutions, thus reducing the banks' available lending base. If this trend escalates, it may weaken banks' ability to support the real economy, leading to systemic risk.

Additionally, he mentioned that stablecoin issuers typically lack adequate prudential regulation and, if not strictly constrained, could lead to financial resources operating in regulatory grey areas, potentially disrupting the entire monetary transmission mechanism.

Clear Disparity with US Approach

It is notable that Bailey's perspective contrasts with the US authorities' attitude towards digital assets. Under the Trump administration, the US Congress has completed legislation on stablecoins, providing legal guarantees for market compliance development. Several institutions have accelerated their activities in dollar-pegged stablecoin businesses after obtaining clear regulatory rules.

As of now, the total market value of stablecoins linked to the Trump camp has exceeded $2.2 billion. In contrast, UK regulators emphasize more on stablecoins' potential impact on capital flows and the overall structure of the financial system.

Stablecoins Require Bank-Level Regulatory Standards

Not only Bailey, but other UK regulators have also expressed a cautious stance on stablecoin development. Several financial institution leaders have suggested introducing regulatory requirements for stablecoin companies that are on par with those for traditional banks, including capital adequacy ratios, risk control, and anti-money laundering checks.

They pointed out that although stablecoins are pegged to fiat currencies, they essentially belong to privately issued financial instruments, which lack transparency in managing underlying assets. Any redemption issues could quickly trigger a chain reaction in financial markets.

UK Not Inclined to Develop CBDC Yet

In addition to warning about stablecoins, Bailey also expressed a cautious stance on the development of central bank digital currency (CBDC). He believes that the UK need not rush to introduce a digital pound but should instead focus on enhancing traditional commercial banks' digital capabilities, gradually refining the payment and clearing system through digitized deposit models.

Bailey noted that promoting the tokenization of traditional deposits by financial institutions offers a more sustainable reform approach compared to an official digital currency, reducing the impact on existing structures while maintaining public trust in the financial system.

Regulatory Attitudes Will Determine Fintech Evolution Path

Bailey's remarks reveal the current divergence among major global economies in digital currency development directions. The UK prioritizes the stability of the financial system, refraining from hastily embracing stablecoins and CBDCs; whereas the US seeks to provide room for innovation through legislation. In the future, these different regulatory approaches may shape two distinct developmental paths, posing new challenges for the international financial governance framework.

The market carries risks, and investment should be cautious. This article does not constitute personal investment advice and has not taken into account individual users' specific investment goals, financial situations, or needs. Users should consider whether any opinions, viewpoints, or conclusions in this article are suitable for their particular circumstances. Investing based on this is at one's own responsibility.

很赞哦!（178）