The Governor of the Bank of England, Andrew Bailey, said that exploring a central bank digital currency (CBDC) would be better for financial stability than asset-backed stablecoins, which the banking chief said he was “skeptical” about.
Speaking at a House of Lords’ Economic Affairs Committee on Tuesday, Bailey said a CBDC would be a better alternative than evolving towards “some world of (asset-) backed stablecoins which has money-like features which could be regulated,” Reuters reported.
Bailey told the Lords Committee the BoE would not be moving into the retail bank account business through a CBDC, adding that it was not a monetary policy tool either, according to the report.
The Bank of England (BoE), like many central banks around the world, has published research and discussed a move to CBDCs of some sort or other. Recently, the Swiss central bank said it was technically ready to deploy a wholesale CBDC, for interbank payments, but eschewed a specifically retail focused CBDC.
It’s not the first time BoE’s Bailey has called for stablecoins to come under scrutiny; indeed, it’s something of a recurring theme with the BoE Governor.