Andrew Bailey Warns Stablecoins Could Trigger Bank Runs and Crime Risks
Bank of England Governor Andrew Bailey tells Bloomberg he opposes bank-issued stablecoins due to risks like bank runs and money laundering, calling instead for tokenized deposits.

Quick Take
Summary is AI generated, newsroom reviewed.
Andrew Bailey opposes big banks issuing their own stablecoins, warning of financial risks like bank runs and money laundering.
He supports tokenized bank deposits as a safer, regulated alternative for digital payments.
Stablecoins could weaken banks' lending power, especially during economic downturns, according to the Bank of England Governor.
Bailey’s stance aligns with growing global caution, as regulators seek safer paths toward digital money innovation.
Bank of England Governor Andrew Bailey has made it clear that he’s not a fan of major banks creating their own stablecoins. In a recent interview with Bloomberg, Bailey said these digital coins could actually cause more harm than good, hurting the financial system, making lending harder, and opening up risks like money laundering and bank runs.
Instead, he’s calling for a safer option, tokenized bank deposits, which are digital versions of the money already held in your bank account.
Why Bailey Isn’t Comfortable With Stablecoins
Stablecoins are digital currencies that are usually backed by very traditional assets like the US dollar or government bonds. They’re built to keep a stable value, unlike cryptocurrencies such as Bitcoin which can rise or drop sharply.
But Bailey doesn’t think letting big banks issue their own stablecoins is a good idea. He says this move could weaken banks’ ability to lend money to households and businesses, especially during tough times. Lending is one of the main ways banks help grow the economy, and Bailey is worried that stablecoins could interfere with that.
He also warned that if people rush to withdraw their money and switch to stablecoins, it could trigger a bank run, a dangerous situation where banks run out of cash because too many people try to take out their money at once.
Tokenized Deposits: The Better Digital Option?
So what’s the alternative? Bailey suggests tokenized deposits—a safer, simpler idea. These are basically digital versions of the money already in your bank account, issued and controlled by the bank itself.
The key difference is that tokenized deposits stay fully inside the existing banking system. They’re regulated, backed by reserves, and much less risky. People can still enjoy the speed and convenience of digital payments, but without giving up the trust and stability that banks provide.
Bailey believes this model allows for digital innovation without adding new threats to the system.
Bigger Concerns: Crime and Control
Bailey’s not just worried about bank runs. He also raised another big concern, which is crime. He flagged that stablecoins that aren’t properly regulated, could be used for illegal activities. People might use them to quietly move money around or even try to hide it, making it hard for authorities to track down things like fraud, money laundering, or other financial crimes.
Another issue is that if too much money goes into stablecoins, it could weaken central banks’ ability to manage the economy. That could lead to trouble during crises when fast action and strong control are needed.
The Future of Money Is Still Unfolding
This debate is happening worldwide, and while some countries are testing stablecoins in small pilot programs, others are sending out warnings. Bailey’s message adds to the idea that digital doesn’t always mean better, especially when the risks aren’t fully understood.
In the end, the Bank of England is not against digital money. But for Bailey, any move forward has to be safe, stable, and backed by trust, and for now, that means tokenized bank deposits, not privately issued stablecoins.

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