Will Trump Have a Problem with the BOE? Analyzing Recent Disagreements

As the global digital finance landscape evolves, stark differences in regulatory approaches have emerged. One such divergence is between the United States under Donald Trump and the Bank of England (BOE), led by Governor Andrew Bailey. 

While Trump promotes stablecoin adoption, the BOE is urging caution—preferring tokenized deposits over private digital tokens. This ideological and regulatory rift could lead to friction between the two financial powerhouses.

The BOE’s Stablecoin Warning 

Andrew Bailey recently issued a stark warning to major banks against issuing their own stablecoins. 

He argued that these digital tokens—pegged to fiat currencies—pose serious risks to financial stability. Bailey advocates for tokenized bank deposits, which offer the benefits of digital finance without pulling funds away from the traditional banking system.

He also suggested that the UK may not need a central bank digital currency (CBDC) if tokenized deposits gain traction. According to Bailey, this route would better safeguard privacy and reduce the risk of financial disruption.

READ ALSO: Flash News: Stablecoins are Only a Means of Payment, Not a CBDC, Fed Governor Says

Trump’s Embrace of Stablecoins 

In contrast, the Trump administration has taken a bullish stance on stablecoins. 

Legislation supporting the issuance of dollar-pegged stablecoins by commercial banks is advancing in Washington. This includes support for World Liberty Financial’s USD1 stablecoin, which already boasts a $2.2 billion market cap.

Trump’s approach signals a more laissez-faire attitude toward financial innovation, encouraging private sector participation and accelerating crypto adoption.

The result is a regulatory gap between the US and England, with the potential for international friction.

UK’s Caution vs. US Endorsement 

While the US races forward with stablecoin integration, the UK prefers a more measured approach. 

Bailey insists stablecoins should face the same regulatory scrutiny as traditional banking products. He warns that their widespread adoption could destabilize the market during financial shocks, potentially triggering new forms of bank runs.

As Chair of the Financial Stability Board, Bailey is also calling for global coordination on regulating digital assets. His emphasis on safeguards highlights England’s prioritization of long-term financial stability over rapid innovation.

READ ALSO: Hong Kong and Korea are Partnering to Create a Stablecoin Bill!

The Digital Pound on Hold 

Unlike the European Central Bank and People’s Bank of China, which are actively piloting CBDCs, the UK is slowing its pace. 

Bailey’s latest remarks suggest the Bank of England is skeptical of the need for a digital pound. Instead, Bailey encourages commercial banks to explore digitized deposits to modernize payments infrastructure.

This contrasts sharply with the US, where private stablecoins are viewed as a cornerstone of future financial infrastructure.

Will This Spark a Transatlantic Dispute? 

The growing policy gap raises questions about interoperability, regulatory coordination, and financial diplomacy between the US and UK.

If stablecoins thrive under Trump’s leadership while the BOE resists adoption, tension between the two economies could deepen—especially if cross-border transactions and global standards come into play.

For now, the BOE stands firm on its cautious path. But as digital finance continues to evolve, pressure may build for the UK to align more closely with the US, or at least re-evaluate its stance.

READ ALSO: What is Trump's Megabill?

Conclusion 

The clash between Trump’s stablecoin enthusiasm and the BOE’s regulatory restraint signals a broader geopolitical divergence in digital finance. 

With the US poised to accelerate adoption and England urging caution, the global future of digital money remains contested. As both nations navigate the crypto frontier, collaboration or conflict may shape the next chapter of financial innovation.

FAQs

1. What is the Bank of England's stance on stablecoins? 

The BOE is cautious, warning against stablecoin issuance by banks and preferring tokenized deposits for stability.

2. How does Trump’s administration view stablecoins? 

Trump’s team supports stablecoin issuance and aims to establish a regulatory framework that encourages digital innovation.

3. What are tokenized bank deposits? 

They are digital versions of traditional deposits, offering secure, bank-regulated alternatives to stablecoins.

4. Will the UK issue a digital pound? 

Currently, the BOE is hesitant to launch a digital pound, prioritizing tokenization over CBDC development.

5. Could this lead to US-UK regulatory conflict? 

Yes, differing approaches to stablecoins may spark cross-border policy disagreements and impact international financial cooperation.