BOE Governor Says Stablecoin Risks Require Coordination With US
Summary
- The Bank of England said it has raised concerns about risks tied to dollar-based stablecoins.
- Reuters reported that Governor Andrew Bailey said issues related to stablecoins would be an important matter to coordinate with the US administration on.
- Reuters also reported that loopholes in the US stablecoin bill, the GENIUS Act, regarding redemption guarantees, along with the future direction of US regulation and whether an international coordination framework is built, are seen as key variables.
Forecast Trend Report by Period
The Bank of England has flagged risks tied to dollar-based stablecoins, highlighting the need for regulatory coordination with the US.
Bank of England Governor Andrew Bailey told a conference on May 11 that stablecoin-related issues will be an important area for coordination with the US administration in the future, Reuters reported.
He said a breakdown in redemptions or a bank-run scenario involving dollar-pegged stablecoins could trigger a large shift of funds into the UK.
Bailey also said the GENIUS Act, a US bill to establish a regulatory framework for stablecoins, has some loopholes in terms of guaranteeing redemptions.
The US has recently stepped up discussions on creating a regulatory framework for stablecoins.
Markets are watching whether major central banks will coordinate on stablecoin regulation and how that could affect financial stability. The direction of US regulation and whether an international coordination framework is established remain key variables.
JH Kim
reporter1@bloomingbit.ioHi, I'm a Bloomingbit reporter, bringing you the latest cryptocurrency news.
