Andrew Bailey, the Governor of the Bank of England, recently issued a warning regarding the use of stablecoins, highlighting potential risks to the banking system and financial stability.
Risks of Stablecoins to Banking System
During an interview with the Sunday Times, Andrew Bailey stated that stablecoins pose systemic risks to banks, which could undermine the entire financial ecosystem. He noted that the proliferation of stablecoins could lead to sovereign governments losing control over their currencies.
Current State and Forecasts of the Stablecoin Market
According to CoinMarketCap data, the current market capitalization of stablecoins stands at $261,716,680,091, with a trading volume of $188,268,793,585. It is projected that the stablecoin market will reach $1 trillion by the end of 2030, and exceed $1.108 trillion by 2035.
Current State of the Cryptocurrency Market
As of writing, the total cryptocurrency market cap is $3.81 trillion, reflecting a 3.39% increase over the last 24 hours. Bitcoin is trading at $123,077, while Ethereum is at $3,041, both showing significant growth.
Thus, the stance of the Bank of England emphasizes the importance of a cautious approach to stablecoins, especially considering their influence on financial stability and the existing cryptocurrency market.
