BoE Monetary Policy Committee member Megan Green stated that tokenized deposits will likely displace stablecoin within five years, as commercial banks seek to protect their traditional deposit base.
Green spoke at a conference in Dubrovnik, Croatia, and noted that digital versions of traditional bank deposits could become the dominant form of digital money. "I think tokenized deposits will likely displace stablecoin, and in five years' time, we might wonder why we were even talking about stablecoin," she said.
Stablecoins are cryptoassets designed to maintain a stable value. They have gained widespread popularity in recent years, though their issuance has stabilized in recent months. Green acknowledged that a market exists for both central bank digital currencies and stablecoins and digital deposits, but predicted that tokenized deposits will prevail once commercial banks recognize the risk of losing traditional deposits.
A different perspective was expressed at the same panel by Christopher Waller, a representative of the US Federal Reserve. He defended stablecoins as a financial innovation capable of reducing costs.
Waller also spoke out against suppressing stablecoins through excessive regulation.