At the 32nd Dubrovnik Economics Conference in Croatia, two top central bank officials publicly clashed over the future of stablecoins, exposing a deep divide between the United States and the United Kingdom on digital money.
Federal Reserve Governor Christopher Waller argued that dollar-backed stablecoins are a harmless payment innovation that could extend the reach of U.S. monetary policy abroad. He dismissed the idea that they pose an inherent threat, framing them instead as a source of much-needed competition in the payments sector. “I’ve always just looked at stablecoins as a payment instrument; there’s nothing evil about it, nothing dangerous about it,” Waller said. He further suggested that banks’ heavy lobbying against stablecoins proves how seriously incumbents view the threat.
Bank of England policymaker Megan Greene offered a starkly contrasting view. She predicted that tokenized bank deposits—not stablecoins—will become the dominant form of digital money. “I think tokenised deposits are probably going to take over from stablecoins and five years from now, I suspect we might wonder why we were talking about stablecoins,” Greene stated. She likened the competition to a race between a tortoise (CBDCs), a hare (stablecoins), and a rhino (tokenized deposits), betting on the rhino. Greene raised concerns that stablecoins drain funding from commercial lenders, could blunt monetary policy transmission, and face unresolved regulatory and financial stability risks.
The split mirrors a wider standoff between the Fed and the BoE. BoE Governor Andrew Bailey recently warned of a likely “coming wrestle” with Washington over cross-border stablecoin oversight, while Deputy Governor Sarah Breeden is reviewing proposed limits on pound-backed stablecoins after industry pushback. Meanwhile, U.S. lawmakers continue to debate the Digital Asset Market Clarity Act, with Senator Cynthia Lummis warning that inaction could let China take the lead.
