Stablecoins Crush Competition as Bank of England Wavers on Digital Pound – Is CBDC Momentum Fading?

Stablecoins are eating central banks' lunch—again. The Bank of England reportedly considers shelving its digital pound plans amid private-sector dominance. Here's why regulators are sweating.

The CBDC retreat: When Tether’s market cap outpaces GDPs of small nations, bureaucrats start questioning their own homework. The UK joins a growing list of governments rethinking sovereign digital currencies after stablecoins cornered the payments niche.

Institutional FOMO meets reality: Banks love blockchain rails… until they realize stablecoins already built them. Now the ‘digital pound’ risks becoming another case study in slow-motion disruption—where fintech moves faster than parliamentary committees.

One cynical take? This isn’t about monetary policy—it’s about control. And decentralized finance just called checkmate.

BOE stays cautious as stablecoins take center stage

Although the BOE have considered shelving their ongoing CBDC project, it does not necessarily mean the central bank is ready to embrace stablecoins just yet.

Earlier this month, governor Andrew Bailey warned against stablecoin domination, citing lack of protections and guarantees offered by traditional bank deposits and the growing risk of them upstaging traditional fiat currencies.

Therefore, he believes that stablecoins could pose systemic risks to financial stability and threaten the very nature of money if not properly regulated.

“We are going to have to look at it very closely through that lens. It’s both a financial stability issue and a money issue in that sense,” said Bailey in his statement.

The attitude held by BOE sharply contrasts those of other countries which have decided to set aside their CBDC projects. The TRUMP Administration has halted work on a CBDC in the U.S. due to financial stability concerns. South Korea has also done the same to its digital currency pilot program.