US, UK central bankers clash on stablecoin future, affecting crypto legislation
US and UK central bankers split over stablecoins this week at the 32nd Dubrovnik Economics Conference. That sounds like conference-room noise. It is not. The argument cuts straight into the US crypto fight: are dollar-backed tokens becoming real payment rails, or are they just a bridge until banks copy the useful parts? Crypto investors want one clean answer. They are not getting one.
US Federal Reserve Governor Christopher Waller, speaking on Sunday, sounded unusually open to stablecoins. He called dollar-backed stablecoins a “payment instrument” that could bring “competition into the payments world” and widen the dollar’s reach. From a Fed official, that is not casual wording. My take: it was a signal, even if he left himself plenty of room to retreat. Bank of England policymaker Megan Greene went the other way. She said stablecoins could “fade from view in a matter of a few years” and said tokenized deposits may win instead.
Most guides frame this as a stablecoin-versus-CBDC story. That is only half right. This is also the same problem slowing US crypto legislation: who gets to issue digital money, who earns from it, and how much of the payment stack banks are willing to lose. Stablecoin yield has already “stymied progress” on the US Digital Asset Market Clarity Act. The bill passed the Senate Banking Committee on May 15 after months of debate, but its path to becoming law in 2026 still looks rough. The banking lobby is pushing back. The US midterm elections will drain political attention. Institutions usually wait when the legal ground is unclear, and traders feel it through volatility, weak conviction, and uncertainty around issuers such as Tether (USDT) and Circle (USDC), which still carry a huge share of crypto liquidity.
The “Stablecoins and monetary policy” panel also covered Central Bank Digital Currencies (CBDCs). Waller, who has been skeptical of CBDCs for years, said enthusiasm has cooled at many central banks. Greene disagreed. She called the future of digital money a “massive race between the tortoise, the hare and the rhino.” In her version, CBDCs are the “tortoise,” stablecoins are the “hare,” and tokenized deposits are the “rhino.” Weird image, yes. Useful image, too. She is saying bank-issued digital deposits could become the serious contender. Why does this matter? Because if banks can offer tokenized versions of normal deposits, stablecoins lose part of their pitch. The dollar peg and easy transfer still matter, but they may look less special if regulated banks offer something similar. That could pull money away from existing stablecoins and change how liquidity moves through crypto markets.
Wyoming Senator Cynthia Lummis raised the political stakes on Saturday. She warned that the US could lose its “leadership position in crypto to other countries, including China,” if Congress does not pass the CLARITY Act this year. “America built the dollar-dominated financial system that has anchored global stability for a century. The Clarity Act ensures we build the next one. The time to act is now, before Beijing decides it will,” Lummis wrote on X. I will be honest: Washington has heard this kind of warning for years, so the line can sound worn out. Still, the concern is fair. US-based projects are trying to compete while guessing what regulators will allow. That makes it harder for institutional capital to enter the market and can limit momentum in assets such as Bitcoin (BTC) and Ethereum (ETH), which tend to benefit when adoption broadens.
What this means
The stablecoin fight is not cooling off. Waller sees dollar-backed tokens as useful payment tools. Greene thinks banks may replace much of that role with tokenized deposits. Two officials, two very different maps. That leaves stablecoin issuers in an awkward position. USDT and USDC are huge now, but their market share could come under pressure if banks get permission to offer deposit tokens with similar speed and lower perceived risk.
Counter to the usual advice, investors should not watch only the token issuers here. They should watch the US Digital Asset Market Clarity Act closely. Passage, delay, or failure will show how serious the US is about giving crypto a workable rulebook. Is this overkill for traders focused on Bitcoin (BTC) and Ethereum (ETH)? No, because market structure rules shape who can enter, how much size they can bring, and what risks compliance teams are willing to approve. The 2026 midterm elections could slow the process further, because crypto will be fighting for attention with every other political priority.
I keep coming back to one point: tokenized deposits are not just another crypto competitor. If that idea moves from speeches into policy, stablecoins may face the banking system itself. That is a different fight. Real progress on the CLARITY Act before the end of 2026 would give the market something it badly needs: fewer guesses, and maybe a clearer path for institutional money into Bitcoin (BTC), Ethereum (ETH), and the rest of the market.