UK’s Central Bank Cautions Banks Against Issuing Their Own Stablecoins

In a move that’s already stirring global conversation, Bank of England Governor Andrew Bailey has made it clear that UK banks should not start minting their own stablecoins. Why? Because handing that kind of money-creating power to private institutions, Bailey says, could mess with the core stability of the country’s financial system.

Stablecoins, which are digital currencies designed to match the value of traditional money like the pound or the dollar, have been gaining traction everywhere. They are fast, borderless, and increasingly seen as the future of everyday payments. But Bailey’s not convinced that letting every bank create its own version of digital pounds is the way forward.

“The lesson of history is clear, the public must be able to trust in the uniformity and safety of money,” Bailey said.

Translation? If too many players start issuing what looks and acts like real money, we risk turning the financial system into a free-for-all with serious consequences for trust, regulation, and monetary policy. This is especially important as the UK inches closer to potentially launching a digital pound, a central bank digital currency (CBDC) backed by the government. Unlike privately-issued stablecoins, a digital pound would be regulated, consistent, and designed to support, not fragment, the existing economy. Bailey’s comments also come at a moment when some global leaders, like Donald Trump, are leaning into a more pro-crypto stance. That contrast is striking, while the U.S. sees opportunity, the UK is clearly stressing caution.

Still, Bailey isn’t anti-innovation. The Bank of England has said repeatedly that it welcomes new ways to pay as long as they are safe, backed by rules, and don’t upend the trust that keeps financial systems functioning. The big picture? The UK isn’t shutting the door on stablecoins. It is saying, if we’re going digital, we need to do it in a way that protects the economy and the people using it.