Stablecoin growth could boost dollar dominance, US Treasury demand: BoE official — SkimNews
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- Wilkins, a Bank of England official, said stablecoin growth could boost dollar dominance and US Treasury demand, noting the dollar accounts for 98% of stablecoin value and gives the currency a 'considerable first-mover advantage'
- Stablecoins now have more than $300 billion in circulation as adoption continues to grow, according to the source
- Pound-denominated stablecoins have been much slower to gain traction, despite UK regulatory efforts to encourage their development
- The Financial Conduct Authority began testing prospective stablecoin issuers through a dedicated regulatory sandbox and finalized rules for UK stablecoin issuance in June
- The Bank of England has been experimenting with digital money, including a recent test of whether stablecoins and a simulated digital pound could work together for cross-border trade payments
- The BoE has shifted to a more accommodating approach to stablecoins following industry criticism that its proposed rules could stifle innovation
Why it matters: With the dollar tied to 98% of a $300+ billion stablecoin market, the US Treasury gets a structural new source of demand — and the UK, racing to issue pound-backed stablecoins under finalized FCA rules, faces a steep uphill battle to claim even a sliver of that market.
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