Bank of England (BoE) Governor Andrew Bailey has issued a stark warning regarding the growing role of stablecoins in the financial system, arguing that banks should avoid issuing these crypto-linked tokens due to the systemic risks they pose. In an interview with The Sunday Times, Bailey said stablecoins could undermine the global financial system and weaken sovereign control over national currencies. Instead, he believes the Bank of England should prioritize tokenizing deposits within traditional banking institutions. Bailey emphasized that the UK central bank should not pursue a central bank digital currency (CBDC), distancing itself from the trend of government-backed digital assets. New Role Brings Global Focus Bailey’s remarks come as he steps into a new position as chairman of the Financial Stability Board (FSB), an international regulatory body tasked with monitoring and making recommendations about the global financial system. This role gives him a platform to influence how stablecoins are treated not just in the UK but globally. His comments suggest he may use the position to curb the rapid expansion of the stablecoin sector. Stablecoins, which are typically pegged to fiat currencies like the US dollar or euro, are a dominant force in the crypto market. They enable cross-border transactions without relying on traditional banking infrastructure, which can increase access to stable currencies in regions with weak financial systems. U.S. Embraces Stablecoin Regulation Bailey’s warning contrasts with the approach taken in the United States. The Trump administration has placed stablecoin regulation high on its policy agenda, viewing the technology as a strategic asset. At the White House Digital Asset Summit in March, US Treasury Secretary Scott Bessent said stablecoins would help cement the dollar’s role as the global reserve currency. Stablecoins Backed by Traditional Assets Most stablecoins in circulation are overcollateralized, backed by cash or highly liquid instruments like short-term U.S. Treasury bills. This model has gained favor among U.S. regulators, who argue it could reduce inflationary pressure by increasing the global demand for American debt securities. With widespread access to these instruments via mobile devices and digital wallets, the U.S. government sees an opportunity to expand dollar reach and influence. Calls for Cohesive U.S. Policy Federal Reserve Chair Jerome Powell has also voiced support for a comprehensive approach to stablecoin regulation in the U.S., calling for clearer and unified policy measures. However, officials in Europe, including Bailey, have expressed concern that widespread adoption of dollar-based stablecoins could destabilize other currencies such as the euro. There are growing fears within the EU that stablecoins could disrupt financial sovereignty and shift economic control away from national institutions. Diverging Approaches Signal Global Debate Bailey’s firm opposition to stablecoins, combined with his leadership role at the FSB, sets the stage for further regulatory scrutiny of the crypto industry. While the U.S. moves to integrate stablecoins into its financial strategy, European officials are signaling resistance to allowing such assets to gain widespread use without stronger oversight. The differing approaches suggest that stablecoins will remain a hot-button issue in global financial policy for the foreseeable future.
2025-07-14 05:09
Despite Bitcoin hitting new all-time highs last week, retail investors have been notably absent from the action, according to market analysts. Meanwhile, institutional interest has surged, particularly in the form of spot Bitcoin ETFs, which saw more than $1 billion in inflows on both Thursday and Friday — a back-to-back milestone never previously achieved. Institutional Surge Behind Latest Price Move Bitwise head of research André Dragosch observed in a Friday post that although Bitcoin is soaring, mainstream interest has yet to catch up. “Bitcoin is at new all-time highs but retail is almost nowhere to be found,” he wrote, referencing data showing weak Google search trends for the term “Bitcoin.” This suggests the current rally is primarily fueled by institutions, not individual investors. Search Trends Fail to Reflect Price Surge Google Trends data supports this narrative. Between June 29–July 5 and July 6–12, global searches for “Bitcoin” increased by just 8%, even as Bitcoin’s price broke past its previous all-time high of $111,970 and continued climbing to $118,780 by Friday. This subdued retail interest contrasts sharply with the surge seen in November 2024, when search interest peaked following Donald Trump’s election win. At that time, retail engagement helped propel Bitcoin past the $100,000 mark for the first time. Retail Sentiment: “Missed the Boat” Some crypto commentators believe that retail investors are sitting out because they feel priced out of the market. “I think a lot of retail folks find out the price of one Bitcoin is 117k and think, nahhh I missed the boat and don’t even give it a second thought,” said Bitcoin analyst Lindsay Stamp. Cedric Youngelman, host of the Bitcoin Matrix podcast, shared a similar sentiment, asking his followers, “At what Bitcoin price do you think retail wakes up? I’ll go first. I don’t think they’re coming for a long time.” Analysts Say Rally Still Has Momentum Despite low retail participation, market experts believe the current rally has more room to run. Bitcoin on-chain analyst Willy Woo commented, “This run has plenty of legs left in it.” The continued interest from institutional players suggests that Bitcoin’s momentum is far from over. Spot ETFs Remain the Main Driver Spot Bitcoin ETFs had an exceptionally strong week, pulling in a total of $2.72 billion over five trading days, according to Farside data. This wave of capital suggests institutional demand remains robust. However, the trend has raised questions about how to measure actual retail interest in the current market landscape. Cointelegraph recently noted that if the ultimate holders of Bitcoin ETF shares are retail investors, then interpreting on-chain data could become more complex. Conclusion While Bitcoin continues to scale new heights, the retail crowd appears hesitant to reenter the market. Whether due to price anxiety or market fatigue, their absence is notable — especially in contrast to the flood of institutional capital pouring into ETFs. As the rally unfolds, attention now turns to whether retail investors will follow — or continue to watch from the sidelines.
2025-07-13 08:51
A political clash over cryptocurrency regulation is escalating in the U.S. Congress as top Democrats push back against Republican-led legislation scheduled for debate this week. House Financial Services Committee ranking member Maxine Waters and subcommittee colleague Stephen Lynch announced their intention to oppose a package of bills that Republicans plan to fast-track starting Monday. According to Waters, the proposed laws lack crucial consumer safeguards and threaten to expose the U.S. financial system to new vulnerabilities. Accusations of Favoring Industry Interests “[Republicans are] doubling down by fast-tracking a dangerous package of crypto legislation through Congress,” Waters said. She further claimed that the bills would make lawmakers “complicit in Trump’s unprecedented crypto scam,” referencing the former president’s ventures in the digital asset space. Legislative Package Includes Three Key Bills The crypto package includes the GENIUS Act, which aims to regulate payment stablecoins and has already passed the Senate. Also on the table are the CLARITY Act, which would establish digital asset market structure, and the Anti-CBDC Surveillance State Act, which seeks to block any development of a U.S. government-issued digital currency. While Republicans hold a slim House majority, it remains uncertain whether they can gather enough support to pass all three bills, particularly in the face of unified Democratic opposition. Concerns Over National Security and Oversight Lynch criticized the GOP for prioritizing crypto industry interests over consumer protection. “My Republican colleagues are eager to continue doing the bidding for the crypto industry while conveniently ignoring the vulnerabilities and opportunities for abuse that exist in crypto,” he said. Many Democrats argue the legislation would reduce oversight by shifting regulatory authority away from the Securities and Exchange Commission (SEC) and toward the Commodity Futures Trading Commission (CFTC). Trump’s Crypto Ties Complicate Debate Trump’s connections to the crypto sector are also drawing attention. Reports indicate his personal wealth has increased by roughly $620 million in recent months, driven largely by investments in crypto-related ventures, including World Liberty Financial. This firm has reportedly launched its own stablecoin, USD1, raising further questions about the intersection of political influence and crypto regulation. Senate to Take Up Market Structure Bill While the GENIUS Act is likely to reach the president’s desk soon, momentum around the CLARITY Act appears to be shifting toward the Senate. Senate Banking Committee Chair Tim Scott and Senators Cynthia Lummis and Kirsten Gillibrand are working toward a new draft of the bill with the goal of finalizing legislation by September 30. House Financial Services Committee Chair French Hill said the revised draft will be the “best” version debated since 2023. Regulatory Roles Could Shift A comprehensive market structure bill would clarify regulatory jurisdiction between the SEC and CFTC. Current drafts suggest handing more oversight to the CFTC, particularly for registering and supervising digital asset platforms. This restructuring could significantly reshape how cryptocurrencies are governed in the United States moving forward.
2025-07-12 03:33
