TechFlow News, March 4: According to a Cointelegraph report, the UK House of Lords questioned Tom Duff Gordon, Coinbase’s Vice President of International Policy, on Wednesday, focusing on whether stablecoins could lead to bank deposit outflows and introduce new risks to the UK financial system.
Gordon stated that fully reserved and regulated stablecoins are “safer than uninsured bank deposits” because they are backed 1:1 by cash and high-quality government securities and are redeemable at face value. He emphasized that stablecoins can significantly reduce payment costs and accelerate cross-border payments.
Members of the UK House of Lords raised concerns about redemption risks during crises, potential impacts on banks, and stablecoins’ role in criminal activities. Gordon countered that fears of bank disintermediation are “greatly exaggerated” and highlighted Coinbase’s strict adherence to KYC and anti-money laundering (AML) measures.
Adam Jackson, Chief Strategy Officer at Innovate Finance, warned that the UK risks establishing a regulatory regime “stricter and less competitive than the EU’s MiCA framework,” causing the UK to fall behind the U.S. and Europe in the stablecoin innovation race.
