Bank of England Deputy Governor Sir Jon Cunliffe says that stablecoins have a critical role to play in the tokenization of money.
In a new speech on the future of money, Cunliffe predicts that stablecoins are going to see widespread adoption for a variety of different uses.
“The emergence in the world of crypto assets of so-called stablecoins is at the forefront of developments in the tokenization of money… So far their use has been confined to facilitating trading and other transactions in the world of crypto assets, but there are proposals to introduce them for other payment purposes in the economy and for cross-border use in competition with money issued by commercial banks and conventional payment systems.”
He says the benefits of stablecoins include an improvement in payment efficiency.
“Stablecoins offer the possibility of greater efficiency and functionality in payments… that transfer commercial bank money between the parties to a transaction.”
Cunliffe also says the Bank of England will cover the issuance of stablecoins in accordance with a regulatory framework that sets out certain requirements.
“The Bank of England’s regulatory framework, in line with the legislation, will cover the issuance of stablecoins… such as custody wallets that are an intrinsic part of the stablecoin arrangement.”
The Bank of England has been investigating whether to introduce central bank digital currencies (CBDC).
Financial advisory firm deVere Group CEO Nigel Green previously said that CBDC will increase the popularity of cryptocurrencies since people will prefer Bitcoin (BTC) and other crypto assets for their privacy benefits.
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