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<p>The Governor of the Bank of England, Andrew Bailey, emphasizes that stablecoins could play a key role in the transformation of the British monetary system. By stating that they can reduce the country’s dependence on commercial banks, Bailey opens the way to a deep reflection on the future of money and credit in the United Kingdom.</p>
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  <h2 class="in-brief--title" id="in-brief">In brief</h2>
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   <li>Andrew Bailey states that stablecoins could separate money from credit and lighten the role of commercial banks.</li>
   <li>The Bank of England is preparing a regulatory framework to integrate stablecoins into payments and settlements.</li>
   <li>The potential access of stablecoins to central bank accounts would strengthen their monetary status in the UK.</li>
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<h2 id="h-stablecoins-and-independence-from-banks">Stablecoins and independence from banks</h2>
<p>In his analysis published by the Financial Times, Bailey recalls that the current system is based on a well-known model. Indeed, banks create money through credit using their customers’ deposits. However, this architecture, derived from the fractional reserve system, exposes savers to a certain risk, as the money depends directly on the solidity of bank loans.</p>
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<p>Stablecoins, on the other hand, could break this direct link between money creation and bank credit. By separating these two mechanisms, the UK could strengthen its resilience to liquidity crises. Concretely, this would mean that stable digital currency would circulate alongside traditional deposits. It would thus offer individuals and businesses a safer alternative for their payments.</p>
<p>Nevertheless, Bailey remains cautious. It is true that he admits that stablecoins offer fertile ground for monetary innovation. However, he emphasizes that the transition must be carefully planned to avoid side effects on financial stability.</p>
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<h2 id="the-debate-around-caps-and-uses">The debate around caps and uses</h2>
<p>The Governor’s remarks come in a tense context. Indeed, the Bank of England recently considered imposing limits on stablecoin holdings. This is a measure considered restrictive and costly by crypto industry players. They feared that the UK might fall behind other more flexible jurisdictions, such as the European Union or the United States.</p>
<p>For Tom Duff Gordon, Vice President of international policy at <a href="https://www.cointribune.com/en/tag/coinbase-en/" target="_blank" rel="noopener noreferrer nofollow">Coinbase</a>, these caps constitute an anomaly. According to him, no other major market has deemed it necessary to limit the use of stablecoins. If this constraint persisted, London would risk losing its attractiveness in a rapidly expanding sector.</p>
<p>However, <a href="https://cointelegraph.com/news/bank-of-england-andrew-bailey-stablecoins" target="_blank" rel="noopener noreferrer nofollow">Bailey’s recent statements</a> could mark a turning point. His openness to a broad adoption of stablecoins for payments and settlements suggests a revision of initial plans. He aims to firmly establish stablecoins in the real economy.</p>
<p>The strongest signal sent by the Bank of England concerns the possibility for British stablecoins to access central bank accounts directly.</p>
<p>Bailey nevertheless insists on the necessary safeguards. Reserve assets will have to be risk-free, insurance mechanisms must protect users against technological failures, and interoperability standards will need to be implemented. In other words, stablecoins will have to evolve to deserve their place alongside the pound sterling.</p>

Bank of England Weighs the Role of Stablecoins in the Future of Banking

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