Policymakers often get swept up by hype when regulating markets. That’s why it was refreshing to hear Bank of England Governor Sir Andrew Bailey push back against the cryptocurrency frenzy. In his July Mansion House speech, he reiterated his skepticism about the need for a “Britcoin” central bank digital currency or UK stablecoins—private tokens issued by financial firms and backed by sterling reserves. While Donald Trump is making stablecoins U.S. law and politicizing private currencies, Sir Andrew’s caution isn’t just wise—it’s necessary.
The governor argues that UK banks shouldn’t issue their own stablecoins, nor should the Bank of England run Britcoin accounts without clear public benefit. This isn’t the stance of a technophobe but of a regulator rightly concerned about creating risky new financial assets. The real question isn’t whether finance can adopt new technology, but whether it should—especially when failure could harm the broader economy.
Former Tory Chancellor George Osborne, now advising a major crypto exchange, claims Britain must embrace stablecoins to stay relevant after Trump’s move. But ex-Labour minister Ed Balls rightly dismissed this as naive, given recent financial history.
Stablecoins aren’t as stable as their name suggests. These private tokens claim to be backed one-to-one by real money, usually dollars, but their reliability depends entirely on the issuer. When a bank creates stablecoins, it’s essentially printing its own currency—without the safeguards, oversight, or central bank backing that real money has. This creates a parallel financial system vulnerable to crashes and contagion, much like America’s 19th-century “free banking” era, where half the banks collapsed.
Yet Trump is charging ahead, letting banks and even non-banks issue dollar-pegged crypto. He’s also openly profiting: one Trump-linked cryptocurrency has reportedly earned at least $320 million since January, while another secured a $2 billion investment from a foreign wealth fund. As Harvard’s Steven Levitsky noted, this level of blatant corruption is unprecedented in modern governments.
Crypto enthusiasts see these currencies as a way to escape state control, taxes, and regulation—echoing far-right distrust of government. UK hedge fund billionaire Paul Marshall frames it as a battle between central bank money and free-market cash. But ideology shouldn’t dictate financial policy. Britain’s financial sector must remain competitive, but on terms that ensure stability—not by chasing Trump-style populism or petro-state opportunism. Cryptocurrencies aren’t just a tech gamble; they’re a bet on who controls money itself.
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