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Bailey mulls over regulation of stablecoin payments

Chris Hamblin, Editor, London, 8 June 2021

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Andrew Bailey, the Governor of the Bank of England and former CEO of the Financial Conduct Authority, believes that the use of stablecoins - used by many wealth managers - as a means of payment has generated 'issues' and is thinking of imposing regulation upon such payments.

Commenting on a new discussion paper on the subject, the Bank has written: "Regulation lays the groundwork for innovation and needs to be clearly established before a systemic stablecoin could safely operate in the UK."

A ‘stablecoin’ is, in the Bank's eyes, a digital token or crypto-currency issued by the private sector which aims to keep a stable value at all times, primarily in relation to existing national currencies. Bitcoin - whose value is notoriously volatile - is not a stablecoin. New forms of digital money are not yet widely used in any economy.

The Bank has not yet made revealed any definite decision to issue its own crypto-currency, although central banks all over the world are sizing up the pros and cons of doing so.

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