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BoE Admits Stablecoins Could Revolutionize Cross-Border Transactions

TL;DR

• Bank of England Deputy Governor Sarah Breeden highlighted stablecoins’ potential to make international money transfers faster and more cost-efficient.
• She envisions a “multi-money” ecosystem where stablecoins operate alongside traditional currencies.
• The BOE plans to introduce a more flexible regulatory framework for stablecoins later this year, drawing inspiration from U.S. legislation and aiming to support innovation while ensuring financial stability for UK households and businesses.
  

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Bank of England Deputy Governor Sarah Breeden signaled that stablecoins could significantly improve the speed and cost of moving money across borders, as the UK’s central bank prepares to clarify its regulatory approach. Breeden said she anticipates a “multi-money” future where stablecoins coexist with conventional currencies, bringing practical benefits to businesses, households, and even international trade.

Stablecoins, once mainly used in crypto markets, are increasingly viewed as a mainstream form of digitally native money.

“With safe adoption, stablecoins can unlock faster settlement for international transactions and even support tokenized asset trading,” Breeden explained during a London conference.

She emphasized that these digital currencies maintain a steady value, contrasting with the volatility of cryptocurrencies like Bitcoin, making them particularly suitable for modern, efficient payment systems.

Bank Of England Moves Toward Flexible Regulation

The BOE is planning a consultation later this year to finalize revised rules for stablecoins. The updated framework is expected to be more industry-friendly, addressing previous concerns that early proposals were overly strict. Breeden noted that some stablecoins’ backing assets could earn interest under the new rules, reflecting a pragmatic approach to innovation while preserving financial safety and encouraging broader adoption among fintech companies and financial institutions.

Breeden’s remarks suggest a constructive shift in the BOE’s stance after Governor Andrew Bailey previously cautioned that stablecoins might undermine public confidence in traditional money. By observing U.S. stablecoin legislation, UK authorities hope to adopt practices that promote secure issuance of sterling-backed digital currencies while remaining competitive in the global payments ecosystem and encouraging innovation.

Multi-Money Ecosystem Could Benefit Businesses And Households

Breeden envisions a UK financial landscape where various types of money coexist, each serving specific functions. In this environment, stablecoins could streamline payments, reduce cross-border transaction costs, and expand opportunities for tokenized security trading, while also improving overall efficiency and trust in digital payments. The BOE’s strategy aims to balance innovation with stability, ensuring that both businesses and households benefit from the efficiencies that digital currencies can provide.

With these measures, the Bank of England appears ready to embrace digital innovation while keeping financial safeguards intact, signaling a more crypto-positive direction for the country’s increasingly dynamic payment infrastructure.