BoE Governor Bailey Warns of Coming Regulatory 'Wrestle' With US Over Stablecoin Standards

According to Reuters, Bank of England Governor Andrew Bailey warned Friday that international regulators face a “coming wrestle” with the U.S. government over stablecoin standards, citing diverging approaches to payments infrastructure. Bailey, who chairs the Financial Stability Board, flagged a specific vulnerability: some U.S. dollar-pegged stablecoins cannot be readily converted to dollars without routing through crypto exchanges, potentially triggering a flight of deposits to jurisdictions with stricter redemption rules during a crisis. The UK’s planned framework requires systemic stablecoin issuers to hold at least 40% of reserves in unremunerated accounts at the Bank of England, while the U.S. GENIUS Act mandates 100% reserve backing but does not require direct redemption from issuers.