BOE Chief Bailey Clashes with Trump Administration Over Stablecoin Support – Regulatory War Brewing?

Bank of England Governor Andrew Bailey just drew a line in the sand—and it's directly against the Trump administration's pro-stablecoin stance. This isn't just policy disagreement; it's a full-scale ideological battle for the future of money.

Central banks vs. crypto: The fight gets personal

Bailey's latest remarks signal growing tension between traditional financial institutions and the White House's push for dollar-pegged digital assets. No numbers? No problem—the subtext screams volumes about regulators scrambling to maintain control.

Meanwhile, stablecoin issuers are probably popping champagne—nothing boosts adoption like a good old-fashioned regulatory turf war. Because when central bankers and politicians argue, innovators keep building. Classic finance.

UK’s caution vs US endorsement

Bailey’s intervention highlights the widening gap in policy approaches between the UK and the US. While American regulators have moved to legitimize stablecoins — even allowing banks to issue them under certain conditions — the UK has taken a more cautious stance, with Bailey insisting that stablecoins should be treated with the same regulatory rigor as traditional banks.

While doubling as the new Chair of the Financial Stability Board (FSB), the international body tasked with monitoring systemic risk, Bailey has pushed for global coordination on the issue. He warned that the widespread adoption of stablecoins could trigger fire sales of underlying reserve assets in the event of a crisis, raising the specter of a new kind of bank run.

Digital pound on hold, tokenization preferred

In a departure from many of his global peers, Bailey also signaled a cooling-off toward launching a central bank digital currency (CBDC), sometimes referred to as a “digital pound.” He suggested the UK might achieve similar outcomes by encouraging commercial banks to digitize deposits instead.

While the Bank of England has conducted extensive research into a potential CBDC, Bailey’s latest remarks suggest the UK is in no hurry to issue one, especially as it weighs privacy, scalability, and implications for retail banking.

This position contrasts with the more aggressive stance of the European Central Bank, which is continuing with pilots for a digital euro, and the People’s Bank of China, which has already rolled out its digital yuan in several provinces.

Bailey said, “I would much rather [banks] go down the tokenized deposit streets and say, how do we digitize our money, particularly in payments.”

He also noted that the US is going towards stablecoins, adding, “The European Central Bank is going towards central bank digital currency. Neither of them is going towards tokenizing deposits.”

The debate over stablecoins comes as trust in digital finance is at a crossroads. A growing number of financial institutions are experimenting with blockchain-based solutions, while regulators scramble to ensure systemic protections are not eroded in the process.

If stablecoins continue to gain traction in the US under a lighter regulatory regime, UK policymakers may find themselves under pressure to either match that pace or double down on stricter oversight. For now, Bailey is making it clear that the UK will not follow blindly.

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