BoE Governor Seeks G20 Mandate To Set Global Standards For Stablecoins and CBDCs

The Coronavirus pandemic and the global economic uncertainty has really got central banks thinking about digital currencies! In his recent speech at the Brookings Institution, Bank of England governor Andrew Bailey has asked the G20 economies to work together and establish common global standards for stablecoins and CBDCs.

Stablecoins are seeing the best growth in this period with rising sectors like DeFi giving it a further push. Over the last month, the fiat-pegged stablecoins added over $100 million on a daily basis. The stablecoins have served as the best source of liquidity for the crypto markets.

During his speech, Britain’s central bank governor opined that the top economies need to arrive at a mutual regulatory consensus for stablecoins. In his speech Bailey noted:

“If stablecoins are to be widely used as a means of payment, they must have equivalent standards to those that are in place today for other forms of payment types and the forms of money transferred through them.”

He also stressed upon filling the gaps in the existing payment infrastructure and updating the regulatory standards in tune with the new innovations. He specifically mentioned that all stablecoins pegged to the Sterling Pound should meet standards applied to the banks across the U.K. He further added:

“If stablecoins are to be widely used as a means of payment, they must have equivalent standards to those that are in place today for other forms of payment types and the forms of money transferred through them.”

BoE Governor Calls Bitcoin Unsuited for Payments

Although the BoE governor is positive about stablecoins, he holds a pessimistic view about public cryptocurrencies like Bitcoin. He said that Bitcoin and other similar assets don’t have any certainty in the value. Thus, he considers them as misfits and “unsuited” for the world of payments.

However, Andrew Bailey is not the first central banking authority to hold skepticism about public cryptocurrencies. Since Bitcoin and public cryptocurrencies challenge the autonomy of central banks, they have never been in their good books.

While coming back to stablecoin and CBDCs, other financial institutions have also ramped up their efforts. Institutions like the Financial Stability Board (FSB) and the International Monetary fund (IMF) have previously spoken about the need for mutual efforts by the top economies to streamline the CBDC functioning.