BoE official predicts tokenised deposits will win race
Bank of England policymaker Megan Greene expects tokenised deposits to overtake stablecoins within five years as commercial banks adapt to digital competition. While Fed Governor Christopher Waller defended stablecoins as a cost-reducing innovation, Greene argued that regulated digital deposits offer a more stable and effective alternative for the financial system.
Bank of England policymaker Megan Greene said tokenized deposits will likely replace stablecoins as the dominant digital payment tool within five years. Greene shared her outlook during a conference in Dubrovnik, Croatia on May 31. The shift reflects competing visions within central banks about which digital asset class will ultimately reshape payments.
### The Race Between Digital Assets Greene characterized the evolution of digital finance as a race between central bank digital currencies, stablecoins, and tokenized deposits. While stablecoins currently lead in cross-border payments, Greene argued their lack of regulatory clarity and potential for illicit use limit their longevity. She expects commercial banks to pivot toward tokenized versions of traditional deposits to avoid losing market share. Greene noted that digital deposits have lagged only because banks are reluctant to sacrifice existing fee structures, but banks will accelerate development once they realize traditional deposit outflows are inevitable.
