Bank of England Governor, Andrew Bailey, has emphasized the importance of creating a clear legal framework for central bank digital currencies and stablecoins.
Bailey stated that central bank digital currencies will become a significant part of the financial system, but they should not replace traditional forms of money.
He added that careful planning and preparation should be done before introducing digital currencies to avoid any unforeseen circumstances.
Although the future of stablecoins and other cryptocurrencies remains uncertain, Bailey noted that governments must not neglect their regulation and development.
Despite being considered a speculative asset class, stablecoins have the potential to be recognized as a form of money, and therefore should be regulated similarly to traditional finance.
The Bank of England has been actively working on developing a central bank digital currency, with plans to expand its digital currency development team to 30 people.
However, Bailey and other officials clarified that the digital British pound should not be associated with crypto assets like bitcoin.