Fed and Bank of England Split on Stablecoin Future

Two central bankers, two very different outlooks. At the 32nd Dubrovnik Economics Conference on May 31, US Federal Reserve Governor Christopher Waller and Bank of England policymaker Megan Greene shared a panel on stablecoins and monetary policy — and walked away with sharply opposing views on where the technology is headed.

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Waller: Dollar-Backed Stablecoins Extend US Reach

Waller came in broadly supportive. He told conference participants that countries leaning on dollar-backed stablecoins effectively import US monetary conditions, giving Washington an extended reach over global finance without any additional policy action.

His framing was straightforward: stablecoins are a payment instrument, nothing more, nothing less. "They are just bringing competition into the payments world," he said. He has long been skeptical of central bank digital currencies (CBDCs), and he noted that enthusiasm for CBDCs has cooled at many central banks — a trend he appears comfortable with.

Greene: Tokenized Deposits Will Win the Race

Greene disagreed on both counts. She argued that stablecoins could become largely irrelevant within five years, displaced by tokenized deposits — essentially blockchain-based versions of traditional bank accounts. "I think tokenized deposits are probably going to take over from stablecoins," she said at the conference. "Five years from now, I suspect we might wonder why we were talking about stablecoins."

She also pushed back on Waller's CBDC skepticism. To illustrate her thinking, she offered a three-way analogy: CBDCs are the tortoise, stablecoins are the hare, and tokenized deposits are the rhino. Her bet, if she had to make one, would be on the rhino. "We'll probably end up with all three," she said, "but if I had to put money in one, it would be tokenised deposits, which I think will probably take off."

US Legislation Still Stuck in the Middle

The policy debate at Dubrovnik mirrors a messier fight playing out in Washington. The US Digital Asset Market Clarity Act — known as the CLARITY Act — cleared the Senate Banking Committee on May 15 after months of back-and-forth between the banking industry and the cryptocurrency sector, particularly over provisions related to stablecoin yield.

The bill still needs to pass both chambers of Congress before it can reach the president's desk. That path is uncertain. Opposition from the banking lobby remains a drag, and the approaching US midterm elections add further pressure on the timeline.

Wyoming Senator Cynthia Lummis raised the stakes on Saturday, warning that inaction hands an advantage to rival nations. "America built the dollar-dominated financial system that has anchored global stability for a century," she wrote on X. "The Clarity Act ensures we build the next one. The time to act is now, before Beijing decides it will."

The CLARITY Act is considered one of the most significant pieces of digital asset regulation the US has attempted. Whether it becomes law in 2026 remains an open question.

Why This Matters

The Dubrovnik exchange puts two credible, senior policymakers on opposite sides of a question that the entire cryptocurrency industry is watching closely: will stablecoins remain central to digital finance, or are they a transitional technology that tokenized deposits will eventually replace? The answer shapes how regulators write rules, how banks position themselves, and how the broader digital asset market develops. For now, there is no consensus — and the US legislative process is feeling that uncertainty directly.