Bank of England Governor Bailey: The UK and US stablecoin rules are about to “square off,” warning that a bank run will come to the UK

Bank of England (BoE) Governor Andrew Bailey warned on May 9 at a meeting hosted by the Bank of England in the UK that the US and the UK are about to enter a “tug-of-war” phase on stablecoin regulation, and that the UK worries it could face bank-run (run-on) risks if it adopts stablecoins. The Block reported on Bailey’s remarks: “We know what happens if stablecoins are subject to a run—they all come here (to the UK),” suggesting that dollar stablecoins promoted by the GENIUS bill in the US, if broadly adopted in cross-border payments, would place systemic risk on the UK as a financial hub that insists on redemption obligations.

Bailey’s core concern: one-way risk from the global circulation of dollar stablecoins

Bailey’s specific concerns about dollar stablecoins:

Dollar stablecoins pushed by the US GENIUS bill are a policy tool to “cement the global dominance of the dollar and US Treasury bills”

If some dollar stablecoins cannot be redeemed directly for dollars and instead must go through crypto exchanges, liquidity for redemption in a crisis could become an issue

If the UK adopts a strict redemption-obligation regime, in a crisis cross-border dollar stablecoins could collectively flow into the UK to seek redemption

The local central bank (BoE) would bear the final responsibility for taking in the run, creating asymmetric risk

“Everyone comes here during a run” is Bailey’s specific concern about the UK’s particular role as a financial hub—if the UK maintains a high standard for stablecoin redemption, it could instead become the point where international runs are absorbed.

The “tug-of-war” position: the UK requires international standards, while the US pushes a unilateral framework

Regulatory principles put forward by Bailey:

“If stablecoins are to become part of the global payments framework, then they must have international standards”

The US GENIUS bill is a unilateral framework that does not sufficiently take into account the regulatory boundaries of other countries

The UK is preparing its own stablecoin regulatory rules and plans to publish the final version by the end of 2026

The UK’s stance: stablecoins must maintain “strong and robust redemption obligations”

This statement is the BoE’s most direct public objection to US stablecoin policy—not opposing stablecoins, but opposing the global expansion of dollar stablecoins without international coordination.

Signals for global stablecoin regulation: US-UK divergence surfaces

The broader policy implications of Bailey’s remarks:

As the Bank of England is one of the world’s major financial centers, it has for the first time clearly expressed a conflict with the US direction on stablecoins

The EU’s MiCA already requires stablecoin issuers to hold reserve assets equal to their issued and circulating amount, which would similarly create a cross-border compatibility issue for dollar stablecoins

In the future, international bodies such as the G7 / G20 / FSB may become the main arena for “coordinating stablecoin international standards”

For Taiwan and the Asia-Pacific region, and for the tug-of-war between the US/UK on stablecoin regulation, a key indicator to watch is whether dollar stablecoins become the mainstream of global payments—if the UK and the EU insist on localized redemption obligations, cross-border circulation of dollar stablecoins will be constrained, and some space may be gained for CBDCs and other fiat-backed stablecoins.

Specific events to track next: the final stablecoin rules to be published by the Bank of England by the end of 2026, the official response from the US to the UK’s stance, and whether the G7 / G20 / FSB will launch a cross-border stablecoin coordination mechanism.

This article UK central bank governor Bailey: US-UK stablecoin rules are “about to enter a tug-of-war,” warns that runs will come to the UK first appeared on Lian News ABMedia.