Governor of the Bank of England: stable currencies can reduce the dependence of the United Kingdom with regard to commercial banks

The governor of the Bank of England – explained Andrew Bailey – characteristics of a plan aimed at granting generalized stable currencies access to the accounts of the Central Bank, warning that these currencies can reshape the financial system in Great Britain. According to a report published by the Financial Times, Billy estimated that stable currencies represent a technology capable of separating money from credit supply, which could lead to reducing the role of commercial banks in the economy.

The governor stressed that such a transformation requires cautious management to maintain the link between money and the credit generation which supports economic activity. His comments in collaboration with the will of the Bank of England to issue a consultation document on the established currency system, which will establish criteria for wide use, either in daily payments, or in the financial markets represented financially.

The Bank of England proposes to grant access to the accounts of the Central Bank in light of the fears of deposits

Billy explained that the British financial system is currently combining money and granting credit through the partial reserve system, as commercial banking deposits directly support loan operations for families and businesses. He pointed out that stable currencies can allow a different arrangement partially separating from money and offering a credit, the possibility of stable banks and currency surviving side by side, while non -banking entities take care of a larger part of the loans.

In turn, the central bank also suggested imposing borders on the ownership of regular parameters, ranging from 10,000 and 20,000 pounds for individuals and ten million pounds for companies. This border, “Sasha Mils”, said these borders.It will reduce the risks of threat of financial stability resulting from rapid and significant movements of deposits outside the banking sector.».

Billy underlined that assets supporting stable currencies should be free from credit, interest and exchange rate fluctuations to guarantee the stability of their value, and that they are accompanied by insurance programs and legal provisions for the solution similar to those related to banking deposits. Billy added that the terms of the exchange must be known, consistent and directly transferred to other forms of money, and not to the digital currency platforms and the conditions of their business. The governor recognized that technology behind stable currencies is very modern, but it raises an old question linked to the work of central banks work, is how to keep the link between money and the credit sector.

The Crapeto sector opposes the proposal to impose a ceiling on stable currencies

Tom Duff Gordon – Coinbase – for the Financial Times, told Financial Times that “The imposition of borders on stable currencies is harmful to British sales and is harmful to the city of London, as well as the Sterling book.” Stressing that one of the other main judicial states has not seen such limits.

Likewise, the CEO of the UK Digital Asset Business Council – Simon Jennss – considered that “”These limits do not succeed in practiceBecause stable currency issuers cannot monitor the owners of these currencies decisively.

He warned that the imposition of these borders will require new costly systems such as digital identities or continuous coordination between the governor. For his part, Riccardo Tordera-Crichi, director of the Payment Association policy, said that “” “Just as there is no restriction on cash, bank accounts or electronic money, there is no valid reason – except for doubts – to impose limits on the property of stable currencies».

This criticism threatens to deepen the tension between the Bank of England and the Ministry of the Treasury, after Chancellor Rachel Reeves embarked on her speech at the Manchen House Hall.Facing the development of blockchain technologies, including digitally represented titles and stable currenciesWith the wave of criticism continues, the Bank of England explained that its proposed limits could be.Coach“The financial system is acclimatized to the growth of digital funds.

In this context, the global market value of the stable currency sector increased to 298 billion dollars and received a big boost after the congress approved gender in July, which put a regulatory framework which could make stable currency an essential corner of the American financial system. Meanwhile, Coinbase expected that the market value of the stable currency sector reaches $ 1.2 billion of dollars by 2028 and recently published a research entitled “Beyond the controversy of deposits“Bank’s allegations dispute that stable currencies threaten traditional financial stability.

The platform has described the novel “The use of the vape of deposits” as a simple pretext in order to protect the monopoly of banks to process payment operations, which generates around $ 187 billion per year. For its part, Coinbase confirms that the banks currently exceed 3.3 billions of dollars in the reserves of the Federal Reserve, which are obtained each year without risk of $ 176 billion, instead of directing them to additional loans.

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