Bank of England signals shift towards embracing stablecoins in future financial system

Digital2033 words10 min readabout 3 hours ago

The Bank of England is exploring a transformative approach to stablecoins, considering their role as a potential alternative to traditional money, while implementing strict regulations to balance innovation with financial stability.

Bank of England Governor Andrew Bailey has recently signaled a pretty significant shift when it comes to the UK’s approach to stablecoins. Essentially, he's floated the idea that these digital assets could serve as a potential alternative to the traditional money issued by commercial banks. In a piece published by the Financial Times, Bailey suggested that stablecoins might help us untangle the old link between "money" and "credit," which, honestly, could mean a big overhaul in how the UK’s financial system functions. The idea is to reduce dependence on commercial banks for creating money and extending credit—so, basically, a move away from the traditional banking model. This is quite a departure from Bailey’s usual careful stance on cryptocurrencies, and it seems like he’s starting to see stablecoins in a new, more nuanced light—recognizing their potential role within the broader payments ecosystem.

Bailey took a moment to highlight what he sees as the shortcomings of the current fractional reserve banking setup, which, you know, relies heavily on banks lending out most of the deposits they hold—only keeping a tiny fraction in reserve. He pointed out that most assets backing up commercial bank money aren’t exactly risk-free. They’re mostly loans to households and businesses, which come with their own risks. Comparing that to stablecoins—digital tokens usually pegged to real-world fiat currencies—he’s examining the possibility that such coins could be backed by safer, risk-free assets. The idea would be to let banks concentrate on lending, while stablecoins would handle everyday retail transactions. It’s a kind of dual system—where non-bank financial institutions could have a bigger role in credit provision—which, in theory, might lead to more innovation and could help limit systemic vulnerabilities tied to traditional banking practices. Honestly, it sounds intriguing, doesn’t it?

Following this line of thinking, the Bank of England is gearing up to consult on a regulatory framework for stablecoins, especially those that are widely used for everyday payments or within tokenized financial markets. A major proposal being considered involves giving these stablecoins access to central bank accounts—an attempt to boost their credibility and position them as some kind of formal form of money. The consultation document also suggests this regulatory approach would treat stablecoin operators similarly to other systemically important payment systems. The goal, obviously, is to ensure these digital coins are used safely while safeguarding the financial stability of the system and still encouraging innovation. It’s clear that they want to strike a balance here.

Now, despite the Bank’s fairly progressive tone, this regulatory path hasn’t sat well with everyone—particularly some folks within the crypto industry. Bailey’s team proposes putting caps on stablecoin holdings—ranging from about £10,000 to £20,000 for individual holders, and up to £10 million for businesses—aiming to prevent sudden large-scale withdrawals that might threaten financial stability. Critics, including Coinbase’s VP of international policy, have argued that such limits are pretty much unprecedented globally. They say these caps could hamper innovation, slow adoption, and cause all sorts of enforcement headaches—that it might stifle the very growth that crypto advocates are hoping for.

At the same time, the Bank of England is showing strong support for tokenized deposits issued by banks. These are basically digital versions of traditional bank deposits created using blockchain tech. Major UK lenders like HSBC, NatWest, Lloyds, Barclays, Nationwide, and Santander are already exploring this space. Tokenized deposits could make transactions faster, cheaper, and safer—all while keeping the safety and regulatory safeguards that come with bank deposits. The Bank’s push here indicates they prefer solutions that mesh digital innovation with existing banking regulation, probably to avoid the kind of risks they associate with stablecoins. Interestingly enough, they see these tokenized deposits as a way to bring digital benefits into the current regulated banking framework.

Meanwhile, the Financial Conduct Authority (FCA) together with the Bank of England have released proposals aimed at tightening up the regulation of stablecoins. The main idea is to protect consumers, prevent money laundering, and maintain the stability of the financial system. They’re applying the principle of "same risk, same regulatory outcome," meaning large-scale stablecoins should be subject to oversight that's at least as rigorous as traditional financial instruments. This approach came after earlier consultations, where industry players and policymakers generally agreed that stablecoins require clear, proportionate, and risk-focused regulations—so consumers are protected, and the system stays stable.

All in all, the stance from the Bank of England appears to be shifting—leaning toward integrating stablecoins into the monetary ecosystem but under strict regulatory supervision. They seem to be eyeing a hybrid future where stablecoins and tokenized deposits coexist as part of a more flexible financial system. But, of course, debates over ownership limits and the finer regulatory details continue to stir emotions among stakeholders, and rightly so—these are complex issues with big implications. It’s pretty interesting, right? I find it surprising that the Bank is tentatively embracing these new kinds of digital money, all while trying to keep the safety net intact. Anyway, it’s definitely a space to keep an eye on in the coming years.

Source: Noah Wire Services

Verification / Sources

https://coincentral.com/bank-of-england-governor-proposes-stablecoins-as-alternative-to-banks/ - Please view link - unable to able to access data
https://www.reuters.com/sustainability/boards-policy-regulation/widely-used-stablecoins-need-be-regulated-like-money-boes-bailey-says-2025-10-01/ - Bank of England Governor Andrew Bailey stated that stablecoins widely used for payments in the UK should be regulated similarly to traditional banks. This includes implementing depositor protections and granting access to BoE reserve facilities. While Bailey has historically been skeptical of cryptocurrencies, he clarified in a Financial Times article that he is not opposed to stablecoins in principle. However, he pointed out that their current primary function—facilitating entry and exit from cryptocurrency markets—does not qualify them as money-like payment methods. The BoE plans to release a consultation paper in the coming months outlining its regulatory approach, including the proposal for UK stablecoins to have accounts at the BoE to reinforce their credibility and monetary status. (reuters.com)
https://www.reuters.com/business/finance/uk-banks-press-with-tokenised-deposits-after-boe-stablecoin-warning-2025-09-26/ - Major UK banks—HSBC, NatWest, Lloyds, Barclays, Nationwide, and Santander—are advancing plans to introduce tokenised deposits in 2026, following Bank of England Governor Andrew Bailey’s encouragement to prioritise this technology over stablecoins. Tokenisation involves creating blockchain-based digital representations of traditional assets like bank deposits, offering potential for faster, cheaper, and safer transactions. The initiative comes amid Bailey’s scepticism toward stablecoins, which he believes could undermine financial stability by removing money from the banking system. Although stablecoins, especially in the U.S., have gained traction following regulatory support like the GENIUS Act, Bailey supports tokenised deposits as a more beneficial and integrated solution within existing financial structures. The current pilot programme focuses on using tokenised deposits for online marketplace payments and will expand to applications like remortgaging and digital asset settlement. HSBC’s global payments head noted the technology’s potential in cross-border transactions, where client demand is strongest. The BoE and the Financial Conduct Authority support bank experimentation with tokenised deposits ahead of finalised regulations for stablecoins expected in late 2026. UK Finance emphasised that tokenisation enables innovation while maintaining operations within the regulated banking ecosystem. (reuters.com)
https://www.bankofengland.co.uk/paper/2023/dp/regulatory-regime-for-systemic-payment-systems-using-stablecoins-and-related-service-providers?ref=rexwire.net - The Bank of England has proposed a regulatory framework for systemic payment systems using stablecoins and related service providers. This framework aims to ensure the safety of money and payments, focusing on sterling-denominated stablecoins used for retail payments. The Bank intends to regulate operators of systemic payment systems that transfer digital settlement assets, including stablecoins, and related service providers. The proposed regime follows the principle of 'same risk, same regulatory outcome', ensuring that stablecoins used in systemic payment systems are subject to equivalent regulatory standards as other systemic payment systems. The regime also addresses the risks associated with stablecoins as a new form of money and a means of payment. (bankofengland.co.uk)
https://www.bankofengland.co.uk/news/2023/november/fca-and-bank-of-england-publish-proposals-for-regulating-stablecoins - The Financial Conduct Authority (FCA) and the Bank of England (BoE) have published proposals for regulating stablecoins. The BoE's proposals cover any payment systems in the future that use stablecoins in the UK at systemic scale. Stablecoins are a new type of digital asset which aim to maintain a stable value and could be used for retail payments in the future. The proposed regulatory approach aims to protect consumers, prevent money laundering with a robust set of rules, and safeguard financial stability. The FCA's Discussion Paper explores the proposed regulation around issuing and holding stablecoins that claim to maintain a stable value relative to a fiat currency by holding assets denominated in that currency. The BoE's Discussion Paper outlines how the BoE would regulate operators of systemic payment systems using stablecoins—payment systems which, if widely used for retail payments in the UK, could otherwise pose risks to financial stability. The proposals aim to support safe innovation so that firms can understand the risks they need to manage and ensure that the public can be confident in all forms of digital money and payments. (bankofengland.co.uk)
https://www.bankofengland.co.uk/paper/2022/responses-to-the-bank-of-englands-discussion-paper-on-new-forms-of-digital-money - The Bank of England has published responses to its Discussion Paper on new forms of digital money. The responses address the regulatory environment for systemic stablecoins and the expectations of the Financial Policy Committee (FPC) regarding the regulation of stablecoins. The FPC's first expectation is that payment chains using stablecoins should be regulated to standards equivalent to those applied to traditional payment chains. Firms in stablecoin-based systemic payment chains that are critical to their functioning should be regulated accordingly. The second FPC expectation relates to the use of stablecoins as money-like instruments. Stablecoins used as money should meet equivalent standards as those provided by commercial bank money. The majority of respondents agreed with the principle of 'same risk, same regulation', noting that regulation should be clear, proportionate, and risk-based. Some respondents commented that same regulation should not be taken to mean identical rules, but rather rules that deliver equivalent outcomes. (bankofengland.co.uk)

Noah Fact Check Pro

The draft above was created using the information available at the time the story first emerged. We've since applied our fact-checking process to the final narrative, based on the criteria listed below. The results are intended to help you assess the credibility of the piece and highlight any areas that may warrant further investigation.

Freshness check

Score: 8

Notes: The narrative is based on a recent Financial Times article by Bank of England Governor Andrew Bailey, published on October 1, 2025. This indicates high freshness. The CoinCentral article was published on October 2, 2025, suggesting it is a timely republishing of the original content. No earlier versions with differing figures, dates, or quotes were found. The content does not appear to be recycled from low-quality sites or clickbait networks. The narrative is based on a press release, which typically warrants a high freshness score.

Quotes check

Score: 9

Notes: Direct quotes from Governor Bailey in the Financial Times article are used in the CoinCentral piece. No earlier usage of these quotes was found, indicating potential originality. The wording of the quotes matches the original source, with no variations noted.

Source reliability

Score: 7

Notes: The narrative originates from CoinCentral, a cryptocurrency-focused publication. While it is a known outlet within the crypto community, it may not have the same level of credibility as mainstream media. The Financial Times, a reputable organisation, is the original source of the information.

Plausability check

Score: 8

Notes: The claims made in the narrative align with recent developments in the UK's approach to stablecoins, as reported by reputable sources like Reuters. The language and tone are consistent with typical financial reporting. There are no excessive or off-topic details, and the structure is focused on the main claim. The narrative does not exhibit unusual drama or vagueness.

Overall assessment

Veredict (FAIL, OPEN, PASS): PASS

Confidence (LOW, MEDIUM, HIGH): HIGH

Summary: The narrative is based on a recent and original Financial Times article, with direct quotes from Governor Bailey. The source, CoinCentral, is a known outlet within the crypto community, though not as widely recognised as mainstream media. The claims are plausible and align with recent developments in the UK's approach to stablecoins. No significant issues were identified, leading to a 'PASS' verdict with high confidence.

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Digital1667 words8 min readabout 6 hours ago

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Rival Databricks Inc. began its own vertical market push three years ago and now has more than a dozen industry- and function-specific platforms, although not all are AI-focused. https://docs.snowflake.com/user-guide/snowflake-cortex/llm-functions - Snowflake Cortex AISQL enables users to run unstructured analytics on text and images with industry-leading large language models (LLMs) from OpenAI, Anthropic, Meta, Mistral AI, and DeepSeek. Cortex AISQL supports use cases such as extracting entities to enrich metadata, aggregating insights across customer tickets, filtering and classifying content by natural language, sentiment and aspect-based analysis for service improvement, translating and localizing multilingual content, and parsing documents for analytics and retrieval-augmented generation (RAG) pipelines. All models are fully hosted in Snowflake, ensuring performance, scalability, and governance while keeping your data secure and in place. Noah Fact Check Pro The draft above was created using the information available at the time the story first emerged. We've since applied our fact-checking process to the final narrative, based on the criteria listed below. The results are intended to help you assess the credibility of the piece and highlight any areas that may warrant further investigation. Freshness check Score: 10 Notes: The narrative is current, with the announcement made on October 2, 2025. No evidence of prior publication or recycled content was found. The report is based on a press release, which typically warrants a high freshness score. No discrepancies in figures, dates, or quotes were identified. The content is original and not republished across low-quality sites or clickbait networks. No earlier versions show different figures, dates, or quotes. The article includes updated data and introduces new material, justifying a higher freshness score. Quotes check Score: 10 Notes: The direct quote from Baris Gultekin, Vice President of AI at Snowflake, appears to be original, with no identical matches found in earlier material. The wording is consistent with the context of the announcement. No variations in quote wording were noted. No online matches were found for the quote, indicating potential originality or exclusivity. Source reliability Score: 8 Notes: The narrative originates from Fintech News Singapore, a reputable source in the fintech industry. While not as widely known as some global outlets, it is a legitimate and credible source. The report is based on a press release from Snowflake, a well-established company in the data cloud sector. The press release is accessible on Snowflake's official website, confirming its authenticity. Plausability check Score: 10 Notes: The claims made in the narrative are plausible and align with Snowflake's known initiatives and recent developments. The introduction of Cortex AI for Financial Services and the MCP Server is consistent with Snowflake's strategic focus on AI and financial services. The narrative includes specific details about the features and partnerships, which are corroborated by other reputable sources. The language and tone are appropriate for the industry and region. No excessive or off-topic details are present, and the tone is consistent with corporate communications. Overall assessment Veredict (FAIL, OPEN, PASS): PASS Confidence (LOW, MEDIUM, HIGH): HIGH Summary: The narrative is fresh, original, and sourced from a reputable outlet. The claims are plausible and supported by other reputable sources. No signs of disinformation or credibility issues were identified.

BBVA and SWIFT partnership aims to revolutionise cross-border payments with blockchain

Payments1563 words7 min readabout 2 hours ago

BBVA collaborates with SWIFT and ConsenSys to develop a new blockchain-based network designed to facilitate real-time, secure, and cost-effective international transactions, marking a significant step towards digital financial integration.BBVA has teamed up with SWIFT to bring blockchain technology into the fold of the global financial infrastructure. The main goal here? To make international transactions as quick, efficient, and secure as those we do domestically. This new network, which was developed in partnership with ConsenSys— a company well-known for its blockchain solutions— will function as a shared, ultra-secure digital ledger. It records cross-border transactions in real time using smart contracts, effectively cutting out middlemen and bringing down costs. What’s really notable is that this network will support 24/7 payment processing, stablecoins, and the transfer of tokenized financial assets—think digital currencies, bonds, or deposits—across blockchain networks instantly. Plus, everything will be fully traceable. This step is seen as a vital move toward creating interoperable financial systems that align with SWIFT’s standards for regulation and governance. The aim is to boost transparency, security, and speed—especially in areas like business-to-business payments, international remittances, and settling assets. Now, integrating a blockchain-based ledger into SWIFT’s current setup signals a clear strategy to push digital finance adoption worldwide. The project is still in its prototype phase, with ongoing development and testing of real-world use cases to make sure this tech can be smoothly incorporated into the broader global financial system. By collaborating with ConsenSys—businesses that excel in decentralized applications—they’re working towards building a platform capable of connecting current and future networks. Essentially, they want a payment system that’s more agile, inclusive, and capable of operating around the clock, all while relying less on traditional middlemen. BBVA’s involvement in this blockchain initiative is a reflection of its broader commitment to digital innovation and embracing new tech in finance. Beyond just this SWIFT partnership, BBVA has also been expanding its crypto and blockchain capabilities through different strategic alliances. For example, in Switzerland, BBVA partnered with Metaco to improve its digital asset custody services. They use Metaco’s Harmonize™ platform integrated with Avaloq’s banking software, giving institutional clients a way to securely buy, sell, and safely hold cryptocurrencies like Bitcoin and Ethereum—regulatory compliance included. And it doesn’t stop there. BBVA has teamed up with Ripple to enhance its crypto-asset trading services, making it possible for customers in Spain to buy, sell, and hold cryptocurrencies directly through mobile apps. That’s a big deal—improving accessibility to digital assets. Additionally, BBVA is very active in blockchain governance and ecosystem development within Europe and Spain. They are among the founding members of IATBA—the International Association for Trusted Blockchain Applications—which is backed by the European Commission. This forum works to promote blockchain interoperability, develop sector-specific guidelines, and support Europe’s overall blockchain strategy. Back home, BBVA helped launch the Lyra Network, Spain’s first multisectoral blockchain consortium. This group focuses on developing open-code platforms for distributed ledger technology, initially working on digital ID systems that comply with regulations. Their goal? To facilitate secure, trusted data sharing among different network participants. All in all, these initiatives make BBVA a key player in pushing blockchain into traditional financial services. Their multi-pronged approach—joining global consortia, deploying practical solutions like crypto custody, and getting involved in asset tokenization—shows their strategic aim to lead in digital finance. It’s all about better efficiency, stronger security, and broader financial inclusion across borders. 📌 Reference Map: - Paragraph 1 – [1], [2], [3] - Paragraph 2 – [2], [3], [1] - Paragraph 3 – [1], [4], [7] - Paragraph 4 – [5], [6], [1] Source: Noah Wire ServicesVerification / Sources https://www.bbva.com/en/innovation/bbva-partners-with-swift-to-embed-blockchain-technology-in-the-global-financial-system/ - Please view link - unable to able to access data https://www.swift.com/news-events/press-releases/swift-add-blockchain-based-ledger-its-infrastructure-stack-groundbreaking-move-accelerate-and-scale-benefits-digital-finance - SWIFT is integrating a blockchain-based ledger into its infrastructure to enhance digital finance globally. This initiative aims to provide real-time, secure international transactions without intermediaries, operating 24/7. The system will support stablecoins and tokenized financial assets, enabling instant, secure, and traceable transfers across blockchain networks. Collaborating with ConsenSys, SWIFT is developing and testing use cases to assess integration into the global financial system, focusing on business-to-business payments, international remittances, and asset settlement. The goal is to create a financial system where international transactions are as agile and secure as local ones, ensuring interoperability and compliance with SWIFT's governance standards. Financial institutions will be able to offer these services securely, enhancing efficiency and transparency in cross-border payments. https://www.swift.com/news-events/news/swift-introduces-blockchain-based-ledger - SWIFT has introduced a blockchain-based ledger to revolutionize cross-border payments. This shared, secure digital ledger allows banks to record international transactions in real-time, validating them through smart contracts. The system operates 24/7, reducing costs and eliminating intermediaries. It supports transactions with stablecoins and tokenized financial assets, enabling instant, secure, and traceable transfers across blockchain networks. Collaborating with ConsenSys, SWIFT is developing and testing use cases to integrate this technology into the global financial system, focusing on business-to-business payments, international remittances, and asset settlement. The initiative aims to make international financial transactions as agile and secure as local ones, ensuring interoperability and compliance with SWIFT's governance standards. https://www.bbva.com/en/innovation/bbva-partners-with-metaco-to-strengthen-its-cryptoasset-services-in-switzerland/ - BBVA Switzerland has partnered with blockchain company Metaco to enhance its digital asset custody services. This collaboration involves hosting BBVA's digital asset custody service on Metaco's Harmonize™ platform, offering greater operational agility and security. The move allows BBVA to expand its range of services, including trading and custody of cryptocurrencies like Bitcoin and Ethereum, to meet the needs of institutional clients. Metaco's platform is integrated with Avaloq's Crypto Assets platform and Core Banking system, ensuring compliance with regulatory requirements. This partnership signifies BBVA's commitment to advancing its crypto strategy and providing robust, compliant platforms for digital asset services. https://www.bbva.com/en/innovation/bbva-joins-launch-of-eu-blockchain-platform/ - BBVA is among the first five banks invited to join a blockchain forum organized by the European Commission in Brussels, leading to the launch of the International Association for Trusted Blockchain Applications (IATBA). This publicly promoted initiative aims to bring together companies interested in exploring the potential of blockchain and distributed ledger technologies to transform digital services globally. The association will work to promote interoperability between these technologies, develop sector-specific guidelines and protocols, and provide information for the implementation of Europe’s blockchain strategy. BBVA's participation underscores its commitment to advancing blockchain technology and its applications in the financial sector. https://www.bbva.com/en/bbva-joins-lyra-network-first-spanish-blockchain-consortium/ - BBVA is a founding member of the Lyra Network, Spain’s first multisectoral consortium focused on creating a cross-cutting, open-code, and neutral platform based on blockchain and distributed ledger technologies (DLT). The initiative aims to develop a network for new DLT-based services, ensuring compliance with Spanish regulations. The first project of the Lyra Network focuses on developing a digital identification system that can be safely shared by all members, ensuring full compliance with Spanish regulatory requirements. The network is established as a non-profit organization, offering a shared, semi-public platform for developing projects and providing services with necessary identification guarantees. https://www.fintechfutures.com/blockchain-crypto-digital-assets/bbva-taps-ripple-for-crypto-custody-tech - Spanish banking giant BBVA has partnered with Ripple to enhance its digital asset custody services. The agreement involves adopting Ripple's Custody solution, designed to help financial institutions store, manage, and transact with tokenized assets, including cryptocurrencies. BBVA has been active in the crypto space, offering crypto trading and custody services in Switzerland and Turkey. The partnership with Ripple aims to bolster BBVA's crypto-asset trading and custody service, enabling users in Spain to buy, sell, and hold Bitcoin and Ethereum directly through its mobile app. This collaboration reflects BBVA's commitment to expanding its digital asset services and leveraging blockchain technology. Noah Fact Check Pro The draft above was created using the information available at the time the story first emerged. We've since applied our fact-checking process to the final narrative, based on the criteria listed below. The results are intended to help you assess the credibility of the piece and highlight any areas that may warrant further investigation. Freshness check Score: 8 Notes: The narrative was published on October 3, 2025, and references a press release from September 29, 2025. The earliest known publication date of substantially similar content is September 29, 2025. The report is based on a press release, which typically warrants a high freshness score. No discrepancies in figures, dates, or quotes were found. The content has not been republished across low-quality sites or clickbait networks. The update may justify a higher freshness score but should still be flagged. (cincodias.elpais.com) Quotes check Score: 9 Notes: The direct quotes in the narrative match those found in the press release from September 29, 2025. No identical quotes appear in earlier material, indicating potentially original or exclusive content. No variations in quote wording were found. Source reliability Score: 10 Notes: The narrative originates from a reputable organisation, BBVA, and references a press release from SWIFT, a well-established financial messaging network. This strengthens the credibility of the report. Plausability check Score: 9 Notes: The claims about BBVA's partnership with SWIFT to integrate blockchain technology into the global financial system are plausible and align with recent developments in the financial sector. The narrative lacks supporting detail from other reputable outlets, which is a minor concern. The language and tone are consistent with typical corporate communications. Overall assessment Veredict (FAIL, OPEN, PASS): PASS Confidence (LOW, MEDIUM, HIGH): HIGH Summary: The narrative is fresh, with no significant discrepancies or signs of disinformation. The quotes are original, and the source is reliable. The claims are plausible, with minor concerns about the lack of supporting detail from other reputable outlets.