Stablecoins not that radical, says Bank of England official
June 10, 2021. Summarized by summa-bot.
Compression ratio: 30.6%. 1 min read.
The Bank of England's officials continue to debate whether or not stablecoins and non-bank private monies pose any fundamentally new questions.
Restricting her focus to stablecoins that are designed to be used for payments, Segal-Knowles argues that financial regulators know perfectly well what's required to ensure that private money is secure and stable enough for public use:
Segal-Knowles went so far as to title one section of her speech “Why do we care?” The nub of the issue when it comes to private money, she says, is the security that its current forms can offer to their users.
For Segal-Knowles, these risks and issues posed by stablecoins are "not fundamentally new" but continuous with the challenges regulators have long faced in making private money safe for wide-scale use.
In a recent speech dedicated to the same issue, Bank of England deputy governor Jon Cunliffe took a slightly different tack, arguing that the increasing shift away from public money to private money in various forms does raise significant questions for states and central banks.
Cunliffe went so far as to suggest that technology-driven developments and shifts in the use of different forms of money, including non-bank private money, could make general access to a digital form of central bank money crucial for ensuring financial stability in future.