🏦 Bank of England Chief Comes for Stablecoins, Says “Tokenized Deposits > CBDCs”

Andrew Bailey wants digital money — just not the kind that disrupts the system.

Forget Bitcoin. Forget CBDCs. The Governor of the Bank of England just gave us a masterclass in how traditional finance plans to stay relevant in the digital age — and spoiler: stablecoins are not invited.

In a pointed interview with The Sunday Times, BOE chief Andrew Bailey fired shots at private stablecoin issuers, warned about losing control over sovereign money, and made it crystal clear: he’s betting on tokenized bank deposits, not crypto chaos or digital pounds.

🚫 Bailey vs. Stablecoins: “They Could Drain the System”

Bailey didn’t mince words.

Stablecoins — even those from banks — pose a “systemic risk” if left unchecked. His biggest concern? They might siphon deposits out of the banking system and wreck the mechanics of credit creation.

“Stablecoins are proposed to have the characteristics of money… but they must maintain their nominal value,” he said.

Translation? If your stablecoin can't act like real money — it shouldn't be in circulation.

🧠 Tokenized Bank Deposits: The ‘Middle Way’

Instead of crypto tokens or government coins, Bailey’s vision is ultra-regulated, ultra-safe: → Bank-issued digital money → Still held within the traditional system → Fully overseen, insured, and integrated

“I would much rather banks] go down the tokenized deposit street,” Bailey stated.

This approach brings the efficiency of crypto without ditching the regulatory training wheels — a move that could digitize payments while protecting the banking core.

📉 No Digital Pound for the UK

While the U.S. flirts with stablecoins and the EU explores CBDCs, Bailey is pressing pause on both.

He slammed central bank digital currencies as unnecessary, warning they require new infrastructure, introduce policy risks, and might disrupt trust.

“The US is going towards stablecoins. The ECB is going towards CBDCs. Neither is going towards tokenized deposits.”

His message? Don’t rebuild the system. Upgrade what’s already working.

🌍 Global Context: US Goes All-In on Stablecoins

Bailey’s comments arrive as the U.S. ramps up its crypto regulation game:

• The GENIUS Act (stablecoin-focused legislation) is gaining bipartisan traction
• Treasury Secretary Scott Bessent calls stablecoins a “tool to reinforce dollar supremacy”
• Donald Trump is turning stablecoins into a campaign flex

But not everyone’s hyped. Regulators are stressing tight guardrails, especially around reserves, redemption rights, and systemic exposure.

🧨 “Bitcoin Isn’t Money”

Bailey couldn’t resist one final jab:

“It’s not money. It doesn’t have the function of money.”

While acknowledging crypto is here to stay, he doubled down on his long-standing Bitcoin skepticism — citing volatility, lack of utility, and the risk to retail.

🧭 Final Word: Digital Money, but Make It British

The Bank of England isn’t against innovation — but it wants it on its terms.

Bailey’s push for tokenized deposits paints a future where finance is faster, smarter, but still centralized. No dollar-backed stablecoin circus. No all-seeing digital pound. Just upgraded TradFi with blockchain polish.

Whether this middle road will win global adoption remains to be seen. But one thing is clear: The battle for the soul of digital money is heating up. And Andrew Bailey just picked his side.

💡 TL;DR

• BOE Governor Andrew Bailey warns stablecoins could “drain” the banking system
• He rejects CBDCs and backs tokenized bank deposits as the safest path to digital money
• Bailey says stablecoins must maintain real monetary properties — or be reined in
• The UK won’t launch a “digital pound” anytime soon
• Bitcoin? “Not money.” Period.