BoE's Bailey Warns of 'Coming Wrestle' With U.S. Over Stablecoin Standards, Flags Convertibility Risk

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. Bailey, who chairs the Financial Stability Board, highlighted a specific vulnerability: some U.S. stablecoins cannot be readily converted to dollars without routing through crypto exchanges, potentially limiting their convertibility in a crisis.

The UK is pursuing a stricter framework, requiring systemic stablecoin issuers to hold at least 40% of reserves in unremunerated Bank of England accounts, with the remainder in short-term UK government debt. The U.S. GENIUS Act, by contrast, mandates 100% reserve backing and monthly disclosures but does not require direct redemption from issuers without intermediaries.