BoE's Greene Sees Tokenised Deposits Overtaking Stablecoins Within 5 Years
Updated
Updated · Reuters · May 31
BoE's Greene Sees Tokenised Deposits Overtaking Stablecoins Within 5 Years
6 articles · Updated · Reuters · May 31
Megan Greene said stablecoins could fade within five years as tokenised deposits — digital versions of bank deposits — become the dominant form of digital money.
At a Dubrovnik conference, the Bank of England policymaker argued banks will eventually push harder into tokenised deposits once they accept they risk losing traditional deposits and fee income anyway.
Greene said stablecoins face structural limits: uneven regulation, use in illicit activity, weaker stability than advertised, and a tendency to pull deposits from banks, potentially blunting monetary policy.
Christopher Waller of the U.S. Federal Reserve pushed back on the same panel, calling stablecoins a useful payment innovation that can cut costs and add competition if not overregulated.
Greene said central bank digital currencies, stablecoins and tokenised deposits may all survive, but she cast tokenised deposits as the likeliest long-term winner.
As US and EU rules diverge, will dollar stablecoins or a digital euro dominate the future of global finance?
Can banks' slow-moving 'rhino' ever catch the stablecoin 'hare' already leading the digital money race?
Is the debate over digital currencies ignoring the huge cybersecurity risks of building finance on unproven technology?
The UK's 2031 Digital Money Forecast: Tokenised Deposits Set to Lead Over Stablecoins
Overview
The UK is taking a leading role in digital money innovation, with the Bank of England predicting that tokenised deposits will dominate by 2031. This approach keeps innovation within the regulated banking system, aiming for both stability and progress. Meanwhile, U.S. Federal Reserve official Christopher Waller sees stablecoins as a way to boost competition in payments and extend the influence of the U.S. dollar, but he is skeptical about central bank digital currencies as interest in them declines. The rapid pace of payments innovation highlights the importance of clear strategies and collaboration between traditional banks and new technology players.