According to Odaily Planet Daily, Bank of England Governor Andrew Bailey stated that stablecoins could play a significant role in the financial system's transition away from reliance on commercial bank lending. This statement suggests a softening of the governor's stance on these digital assets. Bailey stated that opposing stablecoins in principle is misguided and emphasized their potential to "drive innovation in payment systems both domestically and internationally." However, he also warned that stablecoins "have several characteristics that require careful scrutiny," such as whether the assets backing them must be completely risk-free to make them "truly stable." Bailey stated that the threat of cyberattacks and other operational risks mean that stablecoin issuers will need to have insurance mechanisms in place to refund holders in a crisis and a resolution framework to ensure that "holders enjoy priority creditor status in insolvency proceedings." Both requirements could increase costs for issuers. The Bank of England plans to publish a consultation paper later this year outlining its regulatory approach for systemically important stablecoins in the UK. (Jinshi)