Quick overview

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Bank of England Deputy Governor Sarah Breeden said stablecoins transfer money faster and cheaper as the British central bank prepares to announce its plans to regulate them.

Breeden said on Wednesday she expects a “multi-money” world to emerge that includes stablecoins. The Trump administration’s landmark legislation to normalize stablecoins has increased interest.

Their safe adoption could allow for faster settlement since they are a form of ‘digitally native’ money, cheaper settlement for cross-border transactions, and permit trading of tokenised securities.

The BOE is planning to launch consultations on its revised plans for stablecoin regulation later this year. It is softening its approach after the industry warned its original position was too tough

Breeden’s comments suggest a more positive stance toward stablecoins after Governor Andrew Bailey warned they risk undermining public trust in money.

Stablecoins are made to maintain a constant value in contrast to other cryptocurrencies like Bitcoin, which are known for their price volatility. Most of the time, they are linked to another currency.

Breeden reaffirmed the BOE’s revised policy for systemically important stablecoins, which would permit some of the underlying assets to earn interest. “I envision the UK payments landscape as a ‘multi-money’ mixed ecosystem, where various money types each serve a specific purpose and maximize usefulness for UK households and businesses,” she stated.