In a recent speech at the Brookings Institution, the Bank of England governor Andrew Bailey has asked the G20 economies to work together and establish common global standards for stablecoins and central bank-backed digital currencies. Stablecoins are seeing the best growth in this period, with rising sectors like DeFi giving it a further push. Over the past month, the fiat-pegged stablecoins added over $100 million daily. The stablecoins have served as the best source of liquidity for the crypto markets.
“Top economies need to arrive at a mutual regulatory consensus for stablecoins.”
During his speech, Britain’s central bank governor opined that the top economies need to arrive at a mutual regulatory consensus for stablecoins. The governor said, “If stablecoins are to be widely used as a means of payment, they must have equivalent standards to those that are in place today for other forms of payment types and the forms of money transferred through them.” The BoE governor stressed upon filling the gaps in the existing payment infrastructure and updating the regulatory standards in tune with the innovations.
The BoE governor calls bitcoin unsuited for payments.
Andrew Bailey is positive about stablecoins, but he holds a pessimistic view about decentralized cryptocurrencies like Bitcoin. He said that Bitcoin and other similar assets don’t have any certainty in the value. Thus, he considers them as misfits and “unsuited” for the world of payments. The BoE governor is not the first central banking authority to hold skepticism about public cryptocurrencies. Since Bitcoin and public cryptocurrencies challenge central banks’ autonomy, they have never been in their good books.
Several central banks across countries are exploring national digital currencies as a competition to growing cryptocurrencies. The People’s Bank of China is very close to launching its national digital currency, reported Sahil Kohli.