Where many earlier forms of crypto-assets, such as bitcoin, have proved unsuitable for widespread use in payments, stablecoins, and particularly global stablecoins, aim to do just that. Not all stablecoins are 5  Bank of England data. These figures exclude Giants and Titans (i.e. higher value notes used as cover for the note issues of banks in Scotland and Northern Ireland). 4  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  4  intended for use in making payments. Some stablecoin proposals may be used to facilitate investments. However, where a stablecoin is used to facilitate the transfer of ‘money’ for buying goods and services and the settling of debts, then it may become widely used a means of payment and store of value. Global stablecoins seek to apply new technology, stemming from the world of crypto-assets, as well as changing some of the fundamentals of the underlying payment chain. They change not only how you pay but what you pay with – rather than a transfer of money between bank accounts, stablecoin systems transfer the asset itself – the stablecoin – from one person to another. Stablecoins could offer some useful benefits. For example, they could further reduce frictions in payments, by potentially increasing the speed and lowering the cost of payments (particularly if global stablecoins were to be established). Stablecoins may offer increased convenience, including via integration with other technology, such as social media platforms or retail services.

As in G7 Working Group on Stablecoins, October 2019, ‘Investigating the impact of global stablecoins’. https://www.bis.org/cpmi/publ/d187.pdf 7 The PRA may require subsidiarisation where firms have material retail banking operations. In making that judgement, the PRA takes account of the value and type of retail deposits and the extent to which they are covered by the FSCS. We expect branches to have under £ of retail deposits, and also take account of the number of depositors and the number of retail and small-company customers with transactional accounts. See: SS1/18, ‘International banks: the Prudential Regulation Authority’s approach to branch authorisation and supervision’.https://www.bankofengland.co.uk/-/media/boe/files/prudential-regulation/supervisorystatement/2018/ss118 6  6  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  6  banking and traditional payment systems, the regulatory response must be grounded in internationallyagreed standards. Global issues require a global response, particularly for multi-currency stablecoins intended for cross-border transactions. Along with the G7, the Financial Stability Board has been leading co-ordination of the international response to global stablecoins. The FSB consulted in April on the regulatory and supervisory challenges they present, with a final report due in October, and the Bank of England supports the efforts to set a baseline set of expectations. These include that stablecoins should be regulated based on the functions they perform and risks they create, and that there should be comprehensive domestic and international regulation and supervision. Global stablecoins should have robust governance and risk management, and be transparent about their stability mechanisms and coin-holders’ rights.