The Bank of England said Monday that so-called stable coins (cryptocurrencies pegged to other assets) need to be closely monitored.
The BoE said it has not yet decided on a detailed regulatory approach to stable coins, but stable coins are always well prepared to back up unpaid coins and have a strong legal claim of one-on-one. He said he hopes to offer redemption.
“The outlook for stable coins as a means of payment … [has] It caused a lot of problems, “said BoE President Andrew Bailey. “It is imperative to ask difficult and appropriate questions about the future of these new forms of digital money.”
In a new digital money treatise published Monday, the BoE said that companies offering stable coins should not enjoy “regulatory arbitrage” through looser rules against traditional banks. Stated.
Stablecoins provide a common way to transfer funds between everyday currencies such as Sterling and cryptocurrencies such as Bitcoin. Unlike Bitcoin, which traded at $ 57,000 a month ago, fell to around $ 36,000, Stablecoin aims to reduce volatility. Analysts at JP Morgan said that most of the trading volume of popular tokens such as Bitcoin and Ethereum is related to stable coins.
The largest stable coin, Tether, has sold over 60 billion, up from about 20 million at the beginning of the year. Its biggest rival, USD Coin, has supplied more than about 4 to 23 billion over the same period. Increased to.
However, regulators have limited consumer protection they offer, their potential role as hard-to-track forms of money, compatibility Their reserves and the ambiguous regulated space in which they operate.
“In order for stable coins to be used with commercial bank money, banks need to be confident that they are safe … and they make promises that cannot be guaranteed to be kept in the long run. Don’t rely on, “BoE said. It is seeking consultation on this topic and will receive feedback by early September.
Cryptocurrency advocates continue to encourage mainstream institutions to adopt digital assets. On Sunday, El Salvador’s President Nayib Bukele announced that he would propose a bill to make Bitcoin a legal tender in the country.
The Bank of England said it has not yet decided whether to introduce Central Bank Digital Currency, an official digital payment system separate from cryptocurrencies. Central banks such as China and the United States are looking for similar options.
In April, the Treasury and BoE announced a joint task force to study the CBDC to improve the payment system. Prime Minister Rishi Sunak said in the UK[ed] To be at the forefront of financial innovation. BoE said the CBDC could play an important role in expanding retail access to central bank money and could tighten control over monetary policy.
Banks have outlined key principles for future investigation of this issue, including financial inclusion, privacy protection, and the lack of harm to BoE’s ability to promote financial and financial stability. He said the potential value of private sector alternatives should also be considered.
Without proper regulation, the CBDC could undermine confidence in the Bank of England and the pound sterling, said Sarah Coles, a personal finance analyst at Hargreaves Lansdown. “Digital currencies …. Banks need to be as effectively regulated as banks so that they can be fully trusted.”
Stablecoins must face ‘difficult questions’, warns Bank of England Source link Stablecoins must face ‘difficult questions’, warns Bank of England