BOE Governor Warns: Private Stablecoins Pose ’Clear and Present Danger’ to Financial Stability

Central banks aren't known for panic—but when the BOE governor starts waving red flags, markets listen.

Private stablecoins threaten financial stability, warns Bank of England chief. The warning comes as crypto-backed 'stable' assets continue proliferating outside traditional oversight—much to regulators' dismay.

No numbers? No problem. The threat's existential, according to Threadneedle Street's top brass. When private issuers create shadow money systems, systemic risks follow. Just ask the 2008 mortgage-backed securities crowd.

Bonus jab: Because nothing says 'stable' like an asset class where 90% of projects die within three years—but sure, let's trust private corporations to back the next generation of money.

UK Would Not Adopt CBDC, Bailey Disagrees With the US and ECB’s Crypto Take

Furthermore, the British central banker stated that England should not adopt a central bank digital currency (CBDC), also known as a ‘digital pound.’ He said that it would be “sensible” for the UK to rather work towards digitizing deposits.

Andrew Bailey was recently appointed as the new chairman of the Financial Stability Board (FSB), an international financial regulator.

Additionally, he openly disagreed with the TRUMP administration’s backing of stablecoins.

“I would say that the US is going towards stablecoins. The European Central Bank is going towards central bank digital currency. Neither of them is going towards tokenising deposits.”

Trump Poised for Quick Stablecoin Win

The US House Financial Services Committee announced ‘Crypto Week,’ starting Monday, to consider three key crypto bills, including the GENIUS Act for stablecoins.

The US lawmakers noted that mid-July will be 'Crypto Week' to create a clear regulatory framework for digital assets and protect financial privacy.#USLawmakers #CryptoWeek #CryptoRegulationshttps://t.co/yhbiz4tMwr

In June, US Treasury Secretary Scott Bessent said in a speech at the WHITE House Digital Asset Summit that stablecoins would “reinforce dollar supremacy.” Fed Chair Jerome Powell has also emphasized the need for stablecoin regulation, noting the importance of protecting consumers.

However, according to BOE’s governor Bailey, stablecoins need to be looked at closely through lens.

“Stablecoins are proposed to have the characteristics of money. That money is a medium of exchange. Therefore, they really do have to have the characteristics of money and they have to maintain their nominal value.”

He also expressed concerns that the spread of stablecoins would undermine their sovereign control over money.

Besides stablecoins, Bailey noted that the extreme volatility of Bitcoin shows that it is “unbacked asset.”

“It’s not money, it doesn’t have the function of money, and if you’re going to buy it, please buy it with your eyes open,” he advised users.