Bank of England Governor Bailey Skeptical of Digital Pound, Cautious on Stablecoins
In a speech at Mansion House, Bank of England Governor Andrew Bailey has cast significant doubt on the urgent need for a central bank digital currency (CBDC) for the UK, referred to informally as “Britcoin.”
In brief
- At his Mansion House speech, Bailey questioned why creating a new digital form of money is preferable to enhancing current digital payment systems.
- He expressed doubt that digitizing existing payments and bank accounts constitutes the “natural next step.” He also voiced concerns about stablecoins potentially undermining local currencies and cautioned banks against launching their own digital assets.
While acknowledging the importance of embracing innovative transaction methods, Bailey contested the case for CBDC currently. “I remain to be convinced why the natural next step is to create a new form of money rather than put digital technology into retail payments and bank accounts,” he stated.
The Bank of England has been examining a digital pound for several years, but no final decision has been made. Neither Canada nor Australia has proceeded with plans for a retail CBDC in the last year.
Separately, Bailey voiced skepticism about stablecoins. He concurred with European counterparts in fears that prominent stablecoins like USDC and Tether could enhance dollar dominance, potentially eroding the sovereignty of national fiat currencies. He stressed, “There may well be a role for stablecoins going forward, but I don’t see them as a substitute for commercial bank money.”
Bank of England has cast doubt on whether UK needs a digital pound, known as “Britcoin”
This stance represents the Governor’s most definitive indication yet that the Bank may abandon its CBDC project, putting the UK at odds with the EU, which is actively developing a digital euro.
Bailey specifically urged influential global banks to refrain from creating their own digital assets (similar to stablecoins). He argued such actions would tie up capital currently used for crucial functions like mortgage lending.
Despite his reservations about CBDCs and stablecoins, Bailey stressed the imperative to innovate and ensure existing payment infrastructures are robust enough for a technologically advanced future.
Crypto in America: Does “Crypto Week” meet any House demands? (News analysis)
Across the Atlantic, the House Committee on Financial Services’ initial attempt to advance “Crypto Week” legislative measures encountered significant hurdles.
Originally scheduled to vote on key crypto bills—most notably the Generic Arbitrary Numerator (GENIUS) Act, designed to establish a regulatory framework for stablecoins—Republican defectors blocked the proceedings. A previous vote on regulating spot Bitcoin and Ethereum ETFs was also postponed.
An eleventh GOP member, reportedly discussed by President Donald Trump, eventually agreed to change their vote. Trump confirmed speaking with several of these Republicans, suggesting they have now committed to supporting Wednesday’s scheduled votes. However, the initial disruption highlights the intense legislative debates around digital assets in the United States.
