Stablecoin demand may soon fade, BoE's Greene says

Bank of England policymaker Megan Greene stirred the digital finance arena yesterday, predicting that stablecoins' current dominance could soon wane, supplanted by regulated tokenised deposits. Speaking from Dubrovnik, Greene's assertion highlights a growing schism within central banks and financial institutions regarding the optimal architecture for digital money, even as some of her BoE colleagues advocate for a broader, regulated role for stablecoins. This isn't merely academic posturing; it underscores a fierce battle for the future of payments and financial stability. As jurisdictions globally, from the EU's MiCA to ongoing US legislative efforts, grapple with stablecoin regulation, central bankers like Greene are increasingly eyeing tokenised deposits as a "safer" alternative, leveraging existing commercial bank infrastructure and deposit insurance. This approach could sideline purely private stablecoin issuers and fundamentally reshape the digital asset landscape, moving it closer to traditional banking rails. The BoE Financial Policy Committee, for instance, has repeatedly emphasized the need for robust risk management for systemic digital assets. The coming months will test these diverging visions. The BoE is expected to offer further clarity on its Digital Pound project while also refining its stance on private digital money. Regulators will monitor how quickly commercial banks innovate with tokenised deposit offerings and whether existing stablecoin giants can adapt to increasingly stringent requirements. Observers should watch for the BoE Q3 2026 Financial Stability Report for deeper insights into how the institution balances innovation with systemic protection.