Bank of England Governor: "Stablecoins Pose a Threat to the 'Monetary System'...Must Be Closely Monitored"

JOON HYOUNG LEE

Summary

Andrew Bailey, Governor of the BoE, conveyed that stablecoins could undermine trust in the current 'money system.'
Governor Bailey stated that central banks should carefully examine payment innovation based on stablecoins.
Governor Bailey mentioned that with the emergence of stablecoins, questions may arise about the justification for maintaining official foreign reserves.

Andrew Bailey, Governor of the Bank of England (BoE), stated that "stablecoins could undermine trust in the existing 'money system.'"

According to Bloomberg on the 3rd (local time), Governor Bailey said in a lecture that "central banks need to carefully examine payment innovation based on stablecoins." He added, "If stablecoins emerge as a new form of money, it is necessary to determine how to ensure the unity of money and secure trust in money."

Governor Bailey reiterated that "the evolution of means of payment must be closely monitored." He also mentioned that "the rise of stablecoins could raise questions about the purpose of 'official foreign reserves' in major advanced economies today," and added, "Currently, foreign reserves are more a means of maintaining financial stability in times of stress."

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