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Stablecoin

Stablecoin Yield Means Banks Must Now offer Customers Real Interest

by admin October 4, 2025

Stablecoins, tokenized versions of fiat currencies that move on blockchain rails, will eventually force banks and other financial institutions to offer customers yields on their deposits to remain competitive, according to Patrick Collison, CEO of payments company Stripe.

The average interest rate for US savings accounts is 0.40%, and in the EU, the average rate on savings accounts is 0.25%, Collison said in response to VC Nic Carter’s X post outlining the rise of yield-bearing stablecoins and the future of the sector. Collison added:

“Depositors are going to, and should, earn something closer to a market return on their capital. Some lobbies are currently pushing post-GENIUS to further restrict any kinds of rewards associated with stablecoin deposits.

The business imperative here is clear — cheap deposits are great, but being so consumer-hostile feels to me like a losing position,” he continued.

Source: Patrick Collison

Stablecoins have steadily grown in market capitalization and user adoption since 2023, which ramped up following the passage of the GENIUS stablecoin bill in the United States. The GENIUS bill paved the way for a regulated stablecoin industry but also prohibited yield-sharing.

Related: Stablecoin market boom to $300B is ‘rocket fuel’ for crypto rally

Banking Industry fights to restrict yield-bearing opportunities for stablecoins

The banking lobby pushed back against interest-bearing stablecoins while US lawmakers were deliberating what provisions to include in the final draft of the GENIUS stablecoin regulation, according to a report from American Banker.

Banks and their Congressional allies argued that stablecoins offering interest-bearing opportunities to clients would undermine the banking system and erode market share.

“Do you want a stablecoin issuer to be able to issue interest? Probably not, because if they are issuing interest, there is no reason to put your money in a local bank,” New York senator Kirsten Gillibrand told the DC Blockchain Summit in March.

However, crypto industry executives see the rise of stablecoins as the next logical progression and predict that stablecoins will consume legacy fiat payments.

“All currency will be a stablecoin. So even fiat currency will be a stablecoin. It’ll just be called dollars, euros, or yen,” Reeve Collins, co-founder of stablecoin issuer Tether, told Cointelegraph at Token2049.

Magazine: Crypto wanted to overthrow banks, now it’s becoming them in stablecoin fight

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October 4, 2025 0 comments

GameFi Guides

EU Risk Watchdog Sounds Alarm on Stablecoin Safeguards

by admin October 4, 2025

In brief

EU regulators have warned that cross-border schemes could create redemption pressures in the bloc, forcing ECB intervention.
The EU has one of the world’s strictest crypto regimes and requires stablecoins to be fully backed by reserves.
The stablecoin market is currently valued at over $300 billion, dominated by U.S. dollar-based tokens.

The European Union’s top financial risk watchdog has called for urgent policy action to address vulnerabilities in stablecoins that straddle the bloc and other jurisdictions, warning of potential systemic shocks if safeguards are not strengthened.

In a statement, the European Systemic Risk Board (ESRB), chaired by European Central Bank (ECB) President Christine Lagarde, warned that “third country multi-issuer schemes – with fungible stablecoins issued both in the EU and outside – have built-in vulnerabilities which require an urgent policy response.”

Stablecoins, designed to maintain a steady value by pegging to assets like currencies or baskets of reserves, have grown into a market worth over $300 billion, according to DefiLlama data. The vast majority are dollar-based, led by Tether’s USDT, which alone commands over 58.53% dominance in the sector.

On prediction market Myriad, launched by Decrypt’s parent company DASTAN, users anticipate further rapid growth in the sector, placing a 72% chance on the stablecoin market cap topping $360 billion before February.

The EU and stablecoins

The EU has already enacted a tough crypto regulatory regime, requiring stablecoins issued within its borders to be fully backed by reserves, and some countries would like to tighten further.

But the ESRB and ECB warn that multi-issuer schemes involving non-EU players tilt the playing field. Investors facing turbulence may prefer to redeem in the EU, where protections are stricter, but reserves inside the bloc might not be sufficient, potentially forcing the ECB to intervene.

The warning reflects wider global unease over the sector from traditional finance. In June, the Bank for International Settlements flagged risks to monetary sovereignty and capital flight from emerging markets, while also pointing to repeated breakdowns in stablecoins’ ability to hold their pegs.

Other jurisdictions are pursuing different paths. In the United States, President Donald Trump signed the GENIUS Act in July, establishing a first formal framework for stablecoin issuance. While it bans issuers from paying interest, exchanges remain free to offer yields, sparking fierce debate between banks warning of mass deposit flight and crypto groups dismissing the threat as exaggerated.

In Hong Kong, legislation that took effect Aug. 1 has been followed by multiple regulatory warnings. Authorities noted sharp, speculation-driven market swings tied to stablecoin licensing rumors and cautioned investors against undue risks. Last month, they reiterated that no yuan-pegged stablecoins have been approved in the city.

Last month, the Bank of England proposed a cap on the amount of stablecoins that individuals and businesses could hold in the UK, with individuals limited to between £10,000 and £20,000 ($13,600–$27,200) and businesses capped at £10 million ($13.6 million). The proposal faced widespread pushback from crypto advocacy groups and businesses, with Coinbase’s vice president of international policy dismissing it as “bad for UK savers, bad for the City and bad for sterling.”

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October 4, 2025 0 comments

MegaETH taps Ethena to launch USDm stablecoin and cut layer 2 fees

GameFi Guides

TOKEN2049 strips U.S.-sanctioned A7A5 stablecoin from sponsor list

by admin October 4, 2025

TOKEN2049 scrubbed all references to the A7A5 stablecoin from its website and speaker roster following Reuters’ inquiry. The swift takedown of the platinum sponsor, targeted by U.S. sanctions, revealed the event’s reactive posture to a major compliance scandal.

Summary

TOKEN2049 dropped sanctioned A7A5 stablecoin from its sponsor list after Reuters inquiries.
A7A5, tied to Kremlin ally Ilan Shor and Russia’s Promsvyazbank, has $70.8 billion in transactions since launch.
41.6B tokens valued at nearly $500 million are in circulation, raising concerns over sanctions evasion and global adoption.

On Oct. 3, Reuters reported that TOKEN2049 organizers, after being contacted for comment, purged all traces of the A7A5 stablecoin, a token sanctioned by the U.S. and U.K. for allegedly helping Russia evade financial penalties.

The removal included deleting A7A5 from its platinum sponsor list and canceling a scheduled stage appearance by its director, Oleg Ogienko, who was present at the Singapore event.

According to the report, Ogienko confirmed to the Reuters team on the sidelines that his operation was the same entity targeted by Western sanctions, stating they had “regularly applied” for and were granted the sponsorship.

Why the A7A5 stablecoin drew Western sanctions

The scrutiny around A7A5 is not incidental. In August, the U.S. and U.K. moved to sanction companies tied to the stablecoin’s launch, alleging that the token formed part of a broader network designed to help Russia skirt financial restrictions imposed after its full-scale invasion of Ukraine. The stablecoin, pegged to the ruble and launched in January, was engineered to create a payments channel outside the reach of Western banks.

According to a detailed analysis by blockchain analytics firm Elliptic, the architect of the A7A5 stablecoin is the A7 group, a Russia-based operation founded by Ilan Shor, a sanctioned Moldovan oligarch and Kremlin ally. The leaks reveal that this is not a rogue startup but a formalized entity partially owned by Russia’s state-owned Promsvyazbank, a bank itself sanctioned for financing Russia’s defense industry.

The token’s scale has quickly grown to match its political baggage. Elliptic reports that there are currently 41.6 billion A7A5 tokens in circulation, valued at nearly half a billion dollars.

More telling, however, is the sheer volume of value it has moved. Since its launch in January, the stablecoin has reportedly handled a staggering $70.8 billion in transactions, a figure that illustrates its rapid adoption as a tool for cross-border settlements.

To build the necessary liquidity for this ecosystem, the architects of A7A5 leveraged the very system they sought to circumvent. Leaked internal chats from April 2025 show A7 employees discussing a concerted market-making campaign, where A7 wallets sent at least $2 billion in USDT to various exchanges to systematically buy up A7A5, creating a deep and liquid market insulated from traditional finance.

Ogienko defends A7A5 stablecoin

On the sidelines of TOKEN2049, A7A5 executive Oleg Ogienko defended the project as a legitimate payments tool. He insisted it had “nothing to do with money laundering” and was compliant under Kyrgyzstan’s regulatory framework.

He described its primary use as facilitating cross-border payments for Russian firms and their trade partners, noting that adoption was strongest in Asia, Africa, and Latin America. In his words, “many of them use our stablecoin… and these are billions of dollars.”

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October 4, 2025 0 comments

Crypto Trends

PayPal’s PYUSD stablecoin supply doubles to $2.5b in a month

by admin October 3, 2025

PayPal’s PYUSD supply has surged 113% month-over-month, hitting an all-time high of $2.54 billion.

Summary

PayPal’s PYUSD stablecoin doubled its circulating supply, reaching $2.54 billion
Over the past month, the token’s supply surged 113%
USDT and USDC still dwarf all other stablecoins combined

PayPal’s stablecoin PYUSD has broken out of its quiet launch phase. On Friday, Oct. 3, the stablecoin reached an all-time high in circulating supply at $2.54 billion. Over the past month, this figure rose 113%. At the same time:

PayPal’s PYUSD outstanding supply and stablecoin transfer volume | Source: Token Terminal

A circulating supply of $2.54 billion puts PYUSD in seventh place among stablecoins, behind USDe, USDS, DAI, and USD1. Much of that supply, specifically $1.84 billion, is on Ethereum (ETH). At the same time, $624 million worth of PYUSD is on Solana (SOL).

PYUSD transfer volume peaked at $2 billion daily on Sept. 26, according to data from Token Terminal. So far, the stablecoin has facilitated almost $60 billion in total transfers. PYUSD has also reached a milestone of 40,000 holders, a figure that has risen consistently since January 2025.

Still, giants Tether and USDC continue to dominate the market, with $176 billion and $75.9 billion in circulating supply. Together, they account for almost 85% of all circulating supply. PYUSD itself accounts for 0.84% of the stablecoin market.

PYUSD stablecoin is taking off

At launch, many called the PYUSD stablecoin a “nothing burger”, citing its limited reach beyond the PayPal and Venmo ecosystem. Still, the firm has worked on decentralizing PYUSD, enabling users to send to external wallets and holding it non-custodially.

PYUSD’s all-time high coincided with the stablecoin market cap breaking the total value of $300 billion. U.S.-denominated stablecoins lead the charge, with USDC growing rapidly. What is more, the monthly stablecoin transfer volume reached $3.27 trillion.

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October 3, 2025 0 comments

GameFi Guides

Plasma Partners With Chainlink to Power Stablecoin Infrastructure

by admin October 3, 2025

Plasma, a newly launched layer 1 blockchain built specifically for stablecoins, has announced a partnership with Chainlink to integrate decentralized oracle services into its network. The collaboration will enable Plasma to provide accurate and high-performance data feeds for stablecoin transactions.

Stablecoin rails for global money movement require accurate, high performance data feeds.

We are partnering with @Chainlink to provide oracle services on Plasma so builders can use digital dollars to create life-changing financial applications for those who need it most. https://t.co/FSt7zHSTwZ

— Plasma (@Plasma) October 3, 2025

Following this partnership, Plasma has joined the Chainlink SCALE program, giving developers access to Chainlink Data Feeds and the Cross-Chain Interoperability Protocol (CCIP). These integrations provide tamper-resistant pricing, real-time payment data, and secure cross-chain messaging to more than 60 other blockchains. Builders on the Plasma network will now be able to create a digital dollar application aimed at delivering accessible and secure financial services.

According to Chainlink, Plasma surpassed $5.5 billion in stablecoin supply just one week after its launch, highlighting rapid demand for stablecoin-focused blockchains.

Aave live at launch

Highlighting the ecosystem push, Aave, the largest liquidity protocol, went live on Plasma at launch. Backed by Chainlink’s infrastructure, Aave brings deep stablecoin liquidity into the Plasma network and expands its reach to a new class of builders and users.

Paul Faecks, founder and CEO of Plasma, said, “Stablecoins are one of the most important use cases in crypto. They give everyone, everywhere permissionless access to core financial services, including saving, spending, and earning. Plasma is building the infrastructure for this global financial system, and we are thrilled to join Chainlink Scale and adopt the Chainlink data and interoperability standards. With Chainlink, Plasma can scale our onchain ecosystem, strengthen our stablecoin rails, and bring mainstream adoption closer to reality.”

Stani Kulechov, Founder and CEO of Aave Labs, said, “Stablecoins are foundational to DeFi’s growth, and Aave secures over 70% of all stablecoins across DeFi lending. Bringing that deep liquidity to Plasma from day one—alongside Chainlink’s leading oracle infrastructure—extends it to a high-throughput network and a new community of builders. Together we unlock instant, low-cost stablecoin movement and secure cross-chain connectivity for real-time payments and next-generation onchain finance.”

Addressing market concerns

The announcement follows a turbulent week for XPL. On October 2, 2025, Plasma Labs issued a statement to counter speculation after its token came under heavy selling pressure. The team clarified that no member or inventor has sold tokens. Plasma stressed that all XPL allocations remain locked for three years with a one-year cliff.

Co-founder Paul added that while some employees previously worked at Blur and Blast, others came from global firms like Google, Meta, Goldman Sachs, and Temasek. Plasma also denied rumors of any ties to market maker Wintermute, confirming it has never contacted them.

Regulatory Backdrop

Plasma’s push comes against a shifting backdrop. In Washington, lawmakers recently passed the Genius Act, the first federal framework for stablecoins. The law requires issuers to be licensed, hold reserves entirely in cash or treasuries, and publish regular audits. It also bans yield payments directly from issuers, as it aims to give the sector long-awaited legal clarity.

Projects like Plasma, which emphasizes transparency and dependable stablecoin rails, may benefit from the legislation if its ecosystem aligns with these standards. Partnerships with established oracle providers like Chainlink are likely to become crucial in meeting expectations for accuracy, security, and compliance readiness.

Also Read: Stablecoin Market Cap Surpasses $300B Milestone For First Time

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October 3, 2025 0 comments

Crypto Trends

Cap Surpasses $200M TVL As Stablecoin Protocol Gains Traction

by admin October 3, 2025

Cap, a stablecoin protocol built on Ethereum, has surpassed $200 million in total value locked (TVL). According to the project’s update, $183 million comes from USDC collateral supporting its cUSD stablecoin, while roughly $30 million stems from SymbioticFi delegations by partners including Hyperithm, MEV Capital, Renzo Protocol, Concrete, and Re7 Labs.

Unlike conventional stablecoins, Cap introduces a model where yield generation is outsourced to whitelisted operators such as banks, high-frequency trading firms, and RWA protocols.

The framework rests on three actors: minters, operators, and restakers. Minters hold cUSD pegged 1:1 with USDC/USDT, operators access delegated liquidity to execute strategies, and restakers provide security to ensure the system remains fully covered.

Through this structure, yield is distributed back to stablecoin holders and restakers, while operators retain their performance margins. Cap’s smart contracts enforce penalties and rewards, aiming to balance returns with systemic protection.

DeFi growth echoes TVL breakout moments

Cap’s $200 million TVL milestone comes days after decentralized perpetuals exchange Aster reported surpassing $1 billion in TVL, alongside 330,000 new users after launching its $ASTER token on BNB Chain.

Aster also logged $345 million in trading volume within 24 hours of its debut, highlighting how fast liquidity can consolidate around protocols promising capital efficiency and market access.

While Cap is carving out its niche in stablecoin yield generation, Aster’s rapid climb illustrates a parallel surge of interest in decentralized trading platforms. Both projects reflect a wider narrative in the Decentralized Finance (DeFi): protocols that combine clear collateral mechanics with scalable user incentives are drawing substantial inflows despite market volatility.

Together, both underscore the diversification of DeFi adoption across different verticals. Cap leans on stablecoin infrastructure and outsourced yield strategies, while Aster focuses on derivatives and trading activity at scale. Their simultaneous TVL milestones suggest that investor demand is not confined to a single category but spans from stable yields to speculative trading.

Also Read: Solana Hits $241 as TVL and Institutional Interest Surges

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October 3, 2025 0 comments

GameFi Guides

Stablecoin Market Cap Surpasses $300B Milestone For First Time

by admin October 3, 2025

While the crypto market is seeing renewed interest, the stablecoin market cap has achieved a major milestone of surpassing $300 billion in market capitalization. The number marks an all-time high for the sector, which is growing tremendously after the GENIUS Act in the U.S. was passed in July this year.

According to data by DeFiLlama, the total value of all stablecoins now sits at $301 billion. This is a 1.84% increase from last week and a 6.5% increase from the last 30 days.

Tether’s USDT has the crown to itself, with it having a dominant market share of 58% and a capitalization of $176.3 billion. Circle’s USDC, which has a 24.5% market share, comes in second with $74 billion. Following USDC is Ethena’s USDe with a capitalization of $14.8 billion and MakerDAO’s DAI with $5.0 billion capitalization at fourth position, respectively.

The rising emergence of stablecoins

There has been a surge in stablecoins over the past few months. A September research report by Citi Group forecasted that the global stablecoin market could be worth $4 trillion by 2030 in a best-case scenario and $1.9 trillion in a base case.

According to Citi, stablecoins could handle up to $100 trillion in transactions each year. Its report says that this is a huge amount, but it’s still not as substantial as the trillions of dollars in transactions that the world’s biggest banks handle on a daily basis. The bank also warned investors that payments between countries take longer because many countries already have fast and cheap ways to pay each other.

Also Read: Coinbase Re-Enters India with Early Access Amid Regulatory Shifts

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October 3, 2025 0 comments

SUI Group’s treasury climbs to $344m after fresh 20m token addition

GameFi Guides

Sui, Ethena launch suiUSDe stablecoin with SUI buybacks

by admin October 2, 2025

Sui has introduced suiUSDe, a new synthetic stablecoin built natively on the network to reduce reliance on dominant assets like USDC.

Summary

Sui, SUIG, and Ethena announced suiUSDe, a Sui-native synthetic stablecoin.
Revenue will fund SUI buybacks, linking stablecoin growth to token demand.
Regulatory and market challenges could slow adoption despite strong potential.

Sui has partnered with Nasdaq-listed SUI Group Holdings and Ethena Labs to launch suiUSDe, a new synthetic stablecoin designed for the Sui blockchain.

Announced on Oct. 1, the project makes Sui (SUI) the first non-EVM network to introduce a native, yield-generating dollar asset, reflecting a major step in its DeFi strategy.

How suiUSDe works

SuiUSDe is powered by Ethena’s (ENA) strategy that pairs digital asset reserves with short futures positions. The token can generate revenue and maintain its dollar peg thanks to this structure. In order to create a loop that returns value to the ecosystem, the Sui Foundation and SUIG will use the net proceeds to buy SUI tokens straight from the market.

Later this year, USDi, a second product, will also debut on Sui alongside suiUSDe. For those seeking stability without taking on additional risk, USDi, a non-yielding stablecoin backed by BlackRock’s USD Institutional Digital Liquidity Fund, offers a more straightforward choice.

Mysten Labs Co-Founder Adeniyi Abiodun described suiUSDe as a “new pillar of Sui DeFi infrastructure,” noting that it connects directly to protocols such as DeepBook. SUIG Chairman Marius Barnett called it the first step toward building a “SUI Bank,” creating one of the first public gateways to the stablecoin economy.

Ecosystem impact and risks

Sui presents itself as a high-performance substitute for EVM-based chains by integrating yield into a native stablecoin. The move could reduce reliance on dominant assets like USD Coin (USDC) while providing decentralized finance developers with sustainable liquidity sources.

But challenges are clear. U.S. regulators are reviewing synthetic stablecoins under the GENIUS Act, which calls for reserve assets to be held in Treasuries.

SUIG also faces questions after federal investigators opened a probe into digital asset treasury companies in late September. With market swings, the reinvestment design could amplify exposure if token demand weakens.

In a bullish case, SuiUSDe could attract adoption, expand liquidity, and help establish Sui as a strong home for stablecoin growth, with steady buybacks boosting SUI demand. Otherwise, regulatory scrutiny or weak market demand could limit adoption, pressuring both the stablecoin and SUI’s value.

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October 2, 2025 0 comments

NFT Gaming

Bitcoin Spot Liquidity Shrinks: Stablecoin NetFlows Turn Negative Despite ETF Inflows

by admin October 1, 2025

Trusted Editorial content, reviewed by leading industry experts and seasoned editors. Ad Disclosure

Bitcoin is pressing higher, pushing above the $115,000 level and edging closer to critical resistance. Momentum has returned to the market, with many traders anticipating a bullish move that could test all-time highs and extend the ongoing bull trend. Optimism is building as Bitcoin’s resilience at elevated levels fuels speculation of another aggressive breakout.

However, not all analysts are convinced that the path ahead is clear. Some caution that risks remain beneath the surface, pointing to worrying signals from liquidity data. Top analyst Axel Adler shared fresh insights showing that the average Stablecoin NetFlow to centralized exchanges has gone negative and has been declining since September 22. This trend suggests that fewer stablecoins are entering exchanges to provide spot liquidity, even as Bitcoin trades at elevated prices.

Stablecoin CEX Netflow | Source: Axel Adler

Declining liquidity can weaken market structure and increase vulnerability to sharper moves, particularly if selling pressure resurfaces. While ETF inflows and strong institutional demand continue to support Bitcoin, the imbalance between reduced stablecoin flows and rising price levels highlights a fragile dynamic. For bulls, holding above $115,000 is essential, but the market’s next phase will depend on whether liquidity returns to sustain a lasting rally.

ETF Inflows Support Bitcoin, But Uptober Needs More Fuel

Top analyst Axel Adler noted that institutional flows remain one of the strongest factors supporting Bitcoin’s price at current levels. Over the last couple of days, ETFs recorded inflows of $947 million, a sizable addition of fresh capital that has provided critical support for the market. These inflows demonstrate that institutional demand for Bitcoin remains robust, even as broader liquidity indicators, such as stablecoin flows, show signs of weakness.

Adler emphasized, however, that while ETF inflows are encouraging, they are not yet sufficient to power a full-fledged Uptober rally. Historically, October has been one of Bitcoin’s strongest months, often marked by outsized gains and aggressive breakouts. But for that momentum to unfold again, Adler argues that the market needs broader confirmation, including stronger spot flows and renewed liquidity entering exchanges. Without that added layer of support, rallies risk losing steam against persistent resistance levels, such as the $117,500 zone that has capped upside moves since the summer.

The timing adds to the importance. With Q4 now underway, investors are looking ahead to what could be a defining stretch for Bitcoin’s bull trend. A breakout above resistance, paired with sustained inflows, would fuel optimism of retesting all-time highs. On the other hand, failure to gather momentum could prolong consolidation and keep traders cautious.

Bitcoin Tests $117,500 Resistance as Q4 Begins

Bitcoin is trading around $116,200, showing strength after recovering from lows near $112,000 earlier this month. On the 3-day chart, price action reveals a series of rebounds that continue to press against the $117,500 resistance zone, highlighted in yellow. This level has been a defining barrier since July, repeatedly rejecting attempts to break higher and marking it as the key level to watch heading into Q4.

BTC reaching critical resistance | Source: BTCUSDT chart on TradingView

The structure still reflects consolidation within a broad range, with $110,000 acting as a firm support base. Meanwhile, the 50-period moving average (blue) is providing short-term guidance, showing Bitcoin holding above it for the first time since the September pullback. The 100-period (green) and 200-period (red) averages remain comfortably below spot price, reinforcing the long-term bullish trend.

For momentum to continue, Bitcoin must decisively clear $117,500 and hold above it, which could open the path toward $120,000 and eventually retests of the summer highs near $125,000. Failure to break out, however, risks extending the consolidation phase, with downside targets at $112,000 and $110,000 once again coming into play.

Featured image from ChatGPT, chart from TradingView.com

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October 1, 2025 0 comments

GameFi Guides

Bank of England signals new framework for stablecoin oversight

by admin October 1, 2025

The Bank of England (BoE) has signaled plans to introduce a new regulatory framework for stablecoins.

In an article published on October 1, Governor Andrew Bailey said the UK should “reap the benefits” of the technology, while ensuring safeguards comparable to those applied to traditional money, arguing that consumers need risk prevention, as stablecoin use grows.

From caution to proposed regulation

In a Financial Times article, Bailey said that it would be “wrong to be against stablecoins as a matter of principle.”

This reflects a shift in tone from previous caution toward a structured approach to digital assets. The BoE plans to publish a consultation paper in the coming months to set out details for what Bailey described as an “advanced regime for stablecoins.”

Treating stablecoins like traditional money

Bailey explained that stablecoins differ from cryptocurrencies like Bitcoin because they are pegged to official currency rather than relying on market value alone. He argued that physical money and digital assets could co-exist in a financial system that looks different from today, with banks and stablecoins both issuing money and non-banks taking on more credit provision.

He added that while stablecoins would not replace bank money, widely used UK-issued stablecoins should be granted access to central bank accounts at the BoE.

This would give them a similar status to commercial bank deposits, with regulation focused on depositor protection and financial stability. Bailey stressed that such changes would need careful consideration before implementation.

Implications for the UK financial system

Regulatory clarity could provide stablecoin issuers with a defined path into the UK’s financial infrastructure. Bailey emphasized the need to balance innovation with financial stability, noting that regulation would need to address risks such as asset backing and operational resilience. If implemented, the framework could allow stablecoins to function alongside existing payment systems and banking services.

The upcoming consultation paper will set out how stablecoins could be integrated into the UK financial system under clear oversight. Its outcome will indicate how the UK positions itself in relation to digital asset regulation among G7 economies.

Also read: IG Secures UK Crypto License for In-House Trading Services

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October 1, 2025 0 comments