Greene says tokenised deposits may outshine stablecoins in digital finance

Stablecoins may not end up being the winning form of digital money if banks move quickly enough to tokenised deposits, Bank of England policymaker Megan Greene said in Dubrovnik, putting a reality check on one of crypto’s loudest claims. Her argument was simple: if commercial banks can offer digital versions of deposits that still preserve regulatory protections, customers may have less reason to shift toward private tokens at all.

Greene made the case at the 32nd Dubrovnik Economics Conference in Orašac, Croatia, where she said the next phase of digital finance could belong to tokenised deposits rather than stablecoins. The distinction matters. Stablecoins are designed to keep a stable value against a reference asset, while tokenised deposits are digital representations of traditional bank money. Greene’s view was that five years from now, the market may wonder why stablecoins consumed so much of the debate if banks decide tokenised deposits are a better way to modernize payments without giving up customer funding.

The policy stakes are broader than crypto speculation. On the same panel, Federal Reserve policymaker Christopher Waller defended stablecoins as a useful innovation and argued that regulation should not choke off competition in payments. The split captures a live transatlantic divide: the Bank of England is trying to shape a framework for systemic sterling stablecoins, while U.S. policymakers have generally been more open to private-sector payment innovation.

That British policy push is already underway. The Bank of England said on November 10, 2025 that it had launched a consultation on a proposed regulatory regime for sterling-denominated systemic stablecoins. Its 2024 innovation paper says it is exploring tokenised deposits, stablecoins and a retail central bank digital currency, and notes participation in BIS Project Agorá. The Bank for International Settlements says Project Agorá involves eight central banks and more than 40 financial institutions testing tokenised central bank reserves and commercial bank deposits on a shared platform.

The industry is not waiting for the debate to end. UK Finance launched a live pilot for tokenised sterling deposits in September 2025 with Barclays, HSBC, Lloyds Banking Group, NatWest, Nationwide and Santander, supported by Quant, EY and Linklaters. The pilot is set to run until mid-2026 and is meant to test person-to-person payments through online marketplaces, remortgaging and digital asset settlement. That makes Greene’s remarks more than a theoretical bet: British banks are already trying to make tokenised deposits operational before stablecoins gain a stronger foothold.

The market backdrop helps explain why this fight matters. Reuters reported that stablecoin issuance has levelled off in recent months even as some observers still expect further growth. Meanwhile, an IMF working paper in March 2026 found that stablecoin demand shocks pushed down short-term U.S. Treasury yields and weakened the dollar, while the Richmond Fed said reserve-backed stablecoins increase demand for U.S. Treasuries. Greene is arguing that the real contest is not just between crypto and banks, but over who controls the next generation of payment rails for online transfers, cross-border payments and programmable commerce.