Bank of England’s Andrew Bailey highlights risks of dollar-pegged stablecoins flooding UK markets without direct redemption standards.
Bank of England Governor Andrew Bailey warned of a looming dispute with the U.S. over stablecoin oversight, citing risks of dollar-denominated tokens overwhelming UK markets during a crisis. He argued that stablecoins lacking direct 1:1 redemption could undermine monetary sovereignty and financial stability.
Bailey’s remarks follow the U.S. GENIUS Act, which allows stablecoin issuers to redeem tokens via exchanges, contrasting with the UK’s requirement for direct redemption. The divide reflects broader tensions over global regulatory standards, with the BoE favoring tokenized deposits over unregulated stablecoins.
The comments align with European Central Bank President Christine Lagarde’s concerns that even euro-pegged stablecoins could disrupt monetary policy transmission. Both central bankers oppose fragmented oversight, signaling potential regulatory friction ahead.