Bank of England backs stablecoins for money tokenization

Bank of England 1
  • Stablecoins will become a great tool for the tokenization of money. 
  • The advantages of stablecoins include improving the efficiency of payments and offering greater functionality in transactions.
  • The Bank of England will regulate the issuance of stablecoins in accordance with a legal framework that sets specific rules.

Stablecoins, according to Bank of England Deputy Governor Sir Jon Cunliffe, are essential for the tokenization of money.

At a recent conference on the future of money, Cunliffe is of the opinion that stablecoins will be widely adopted for various uses.

“The appearance in the world of crypto assets of the so-called stablecoins is at the forefront of advances in the tokenization of money… Until now their use has been limited to facilitating trade and other transactions in the world of crypto assets, but there are proposals to introduce them for other payment purposes into the economy and for cross-border use in competition with money issued by commercial banks and conventional payment systems.”

According to him, among the advantages of stablecoins is the improvement in the efficiency of payments.

“Stablecoins offer the potential for greater efficiency and functionality in payments…which transfer money from commercial banks between parties to a transaction.”

Furthermore, according to Cunliffe, the Bank of England will cover the issuance of stablecoins in accordance with a legal framework that sets specific rules.

“The Bank of England regulatory framework, in line with the legislation, will cover the issuance of stablecoins… such as custodial wallets which are an intrinsic part of the stablecoin deal.”

To determine whether to implement central bank digital currency (CBDC), the Bank of England has been conducting investigations.

Nigel Green, CEO of financial advisory firm deVere Group, recently stated that CBDC will drive cryptocurrency adoption as more people will choose Bitcoin (BTC) and other digital assets for their privacy benefits.