BOE Governor Bailey Says Stablecoin Regulation Will Inevitably Clash With US

Andrew Bailey, governor of the Bank of England, has openly raised the prospect of a policy clash with the US over stablecoin regulation.

Bailey said at a recent conference that stablecoins need international standards if they are to become part of the global payments system, Cointelegraph reported on May 11. In that process, a "wrestle" with the US administration would be unavoidable, he said.

The stablecoin market is largely built around dollar-based tokens. It is worth more than $310 billion, and major stablecoins are issued against collateral including US Treasuries and other dollar assets. That has given the US dominant influence in discussions over a global regulatory framework.

The US has maintained a relatively loose regulatory stance. President Donald Trump last July passed the GENIUS Act, which set out a regulatory framework aimed at fostering the stablecoin industry.

The UK and Europe, by contrast, are considering tighter rules because they view stablecoins as a potential risk to the existing financial system. Bailey specifically pointed to the structure of some stablecoins, saying they are difficult to redeem for cash without going through an exchange.

He added that if confidence in stablecoins were shaken, it could trigger a run and cause funds to move all at once. Dollar-based tokens could also flow into other countries' financial systems in that process.