Bank of England Governor Andrew Bailey has warned of a “coming wrestle” with the U.S. over stablecoin standards, claiming Friday that dollar tokens lacking direct redemption could flood Britain during a crisis. “If we want stablecoins to be part of the architecture of payments…
obally […] they’re only going to work if we have international standards,” Bailey said at a BoE conference on financial imbalances, as quoted by Reuters. “Frankly, that, I think, is going to be a coming wrestle with the [U.S.] administration.” “We know what would happen if there was a run on a stablecoin—they’d all turn up here,” Bailey added. Bailey, who also chairs the Financial Stability Board (FSB), has long warned that dollar-pegged tokens could erode monetary sovereignty, pushing UK banks toward tokenized deposits over stablecoin issuance
The remarks land alongside a pushback against stablecoins from European Central Bank President Christine Lagarde, who argued even euro-denominated tokens would threaten financial stability and monetary policy transmission. Parallel interventions from Europe’s two most powerful central bankers follow Trump’s GENIUS Act signing last July, with the FDIC and OCC since proposing implementation rules. The Senate Banking Committee is set to mark up the CLARITY Act this month, the market structure bill the White House is targeting for July 4 passage.
Lines and levers The FSB’s leverage does not depend on formal rulemaking authority, but on “shaping a baseline international consensus that jurisdictions often converge toward” as cross-border risks emerge over time, Stablecoin Standard chairman and co-founder Christian Walker told Decrypt. “Stablecoins are inherently global, so long-term fragmentation between U.S., UK, EU and Asian regimes is unlikely to be sustainable,” Walker said. While implementation remains uneven, the FSB’s recommendations still “shape how central banks, prudential regulators and institutional participants assess credibility and…