UK Lords Press Coinbase on Stablecoins, KYC and Bank‑Run Risks
UK Lords questioned a Coinbase executive on stablecoin risks like bank runs, illicit finance, and KYC compliance.Summary
The UK House of Lords questioned Coinbase's Vice President for International Policy, Tom Duff Gordon, regarding the risks stablecoins pose to the UK financial system, specifically concerning deposit drains, illicit finance, and Know Your Customer (KYC) adherence.
Duff Gordon defended regulated, fully reserved stablecoins, asserting they are safer than uninsured bank deposits due to being backed one-to-one by cash and government securities, and capable of reducing payment costs. He cautioned that overly strict proposed regulations from the Bank of England and FCA regarding capital and holding limits risk stifling competition, potentially causing the UK to lag behind the US (with its GENIUS Act) and the EU (with MiCA).
Lords members pressed on redemption risk and the potential for stablecoins to trigger a "deposit drain." Duff Gordon countered these fears as exaggerated, noting stablecoins are already used by major corporates. He also emphasized Coinbase's robust KYC/AML screening, arguing on-chain transparency aids policing illicit flows compared to cash. This hearing contrasted with a previous session where critics expressed strong doubts about stablecoins becoming mainstream.
(Source：Cointelegraph)