A Bank of England official warned that the rise of stablecoins could boost the US dollar’s dominance, as digital dollars would broaden access to the currency and encourage stablecoin issuers to buy more US Treasury debt.
In a Bloomberg Tech interview, KPMG UK Chief Economist Yael Selfin explained that while AI and chip costs are rising, they are not expected to become a major source of inflation for the UK. The Bank of England remains more concerned about the impact of higher household energy prices on inflation.
The Digital Pound Lab of the Bank of England carried out a trial of a cross‑border trade‑finance transaction, using a stablecoin for the payment leg and a simulated digital pound for settlement, to explore interoperability between private‑sector stablecoins and the future UK central bank digital currency.
The Bank of England is planning to ease capital rules for UK lenders with the stated objective of boosting lending activity and supporting financial markets during crisis periods.
Bank of England Deputy Governor Sarah Breeden warned at the ECB’s annual symposium in Sintra, Portugal that autonomous AI agents in financial markets could amplify volatility during periods of stress and may require stricter regulatory oversight.