Bank of England Governor Andrew Bailey said international regulators will need to confront the United States as they work toward global standards for stablecoins, underscoring the tension between fast-growing crypto adoption and financial oversight. He argued that if stablecoins are to become part of the global payments system, they will only function properly under internationally coordinated rules.
Bailey’s comments come as Washington moves in a different direction. The Trump administration has sought to encourage the crypto sector and has backed the use of stablecoins through the GENIUS Act, which created a formal framework for issuers. In contrast, regulators in other major markets are considering tighter supervision, viewing stablecoins as a relatively lightly regulated substitute for bank money that could create risks for the broader financial system.
The stablecoin market is now worth more than $317 billion, with the largest tokens overwhelmingly tied to the US dollar. Most are backed by a combination of US Treasury bills and dollar reserves, reinforcing the central role of the American financial system in the sector. Bailey, who also chairs the Financial Stability Board, said he sees potential dangers for market stability if these assets become more widely used.
One of Bailey’s concerns is convertibility. He warned that some stablecoins may not be easily redeemed for cash without going through a crypto exchange, which could become a problem during periods of stress. If stablecoins are used more extensively for cross-border payments, he said, dollar-linked tokens that are difficult to redeem could move into jurisdictions such as the UK, where authorities are preparing stricter rules on conversion and redemption.
His remarks echo concerns raised by US banking groups, which have urged Congress to limit third-party platforms such as crypto exchanges from offering yield on stablecoin holdings. Recent legislative revisions would ban rewards on idle stablecoin balances while still allowing other forms of customer incentives. The Senate Banking Committee has scheduled a markup of the bill after previously delaying consideration of the broader market structure proposal. Bitcoin held above $80,000 on Sunday, briefly rising past $82,000 as geopolitical tensions in the Middle East intensified after US President Donald Trump rejected Iran’s counterproposal for a peace agreement. The renewed uncertainty around the conflict, especially the risk to shipping routes through the Strait of Hormuz, added to volatility across financial markets.
The cryptocurrency initially slipped after Trump’s comments, falling from about $81,430 to $80,520 within 45 minutes, before reversing sharply and climbing to roughly $82,347 later in the session. The move triggered a wave of liquidations, with about $64 million in short positions wiped out over the past four hours, according to market data.
Oil prices also advanced on the latest developments, with crude rising 5% to about $99 a barrel as traders assessed the possibility of prolonged disruptions to energy flows. US equity futures were modestly higher, though broader risk sentiment remained sensitive to headlines from the region.
Despite the conflict, Bitcoin has shown notable resilience. Since the war began in late February, the token has climbed about 30%, outperforming both the S&P 500 and gold over the same period. Even so, it remains well below its October peak near $126,000, leaving the market focused on whether recent strength can be sustained.
10x Research CEO Markus Thielen said Bitcoin ’s ability to stay above $80,000 may also be helped by two developments in Washington this week. The first is a Senate vote on Monday regarding Kevin Warsh’s confirmation as Federal Reserve chair. The second is the Senate Banking Committee’s review of the CLARITY Act on Thursday, a bill that could shape the US regulatory framework for digital assets.
Thielen noted that a change at the Fed would remove an important layer of uncertainty, while the crypto legislation could improve regulatory visibility for institutional investors. Together, those events may provide additional support for Bitcoin at a time when macroeconomic and geopolitical conditions remain unsettled.
