The Bank of England outlined a notably progressive position on digital innovation this week, with Executive Director Sasha Mills saying the institution would be “open minded” about using stablecoins for wholesale payments. The stance contrasts sharply with a BIS report last week that classified stablecoins as unsound money.
Mills emphasized that financial stability remains paramount, but a recent legal change gave the Bank a secondary innovation objective, requiring a more balanced approach. She said the Bank wants to maintain “same risk, same regulatory outcome and give space to innovators to compete to deliver solutions.”
Additionally, she acknowledged that current market infrastructures need upgrading. “At some point, it makes more sense to build new structures than try to modify the existing ones,” she said. “In our view, this point in time is fast approaching, if not already here.”
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