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UK Lords Clash Over Stablecoins’ Role in Future Money System
Last Updated: February 04, 2026
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Key Takeaways
- The UK's House of Lords debate showed doubts on stablecoins’ future, with experts split on their role in banking and regulation;
- Giles said stablecoins lack clear UK rules and mostly serve as crypto entry and exit tools, not everyday money;
- Wilmarth warned that US policies such as the GENIUS Act risk weakening oversight by allowing non-banks to issue dollar tokens.
The UK’s House of Lords held a session to hear opinions on stablecoins as part of a new inquiry into how they should be managed under national rules.
During the session, members of the Financial Services Regulation Committee (FSRC) questioned two experts with very different opinions: Financial Times economics writer Chris Giles and US law professor Arthur E. Wilmarth Jr.
They discussed how stablecoins might compete with banks, their role in cross-border payments, the risks of criminal use, and how US policies, such as the GENIUS Act, compare.
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Wilmarth argued that stablecoins should not be viewed as a natural part of the financial system. In his view, the GENIUS Act is a “terrible” idea because it lets non-banks issue stablecoins tied to the US dollar.
He described this as a “regulatory loophole” that allows new players to enter the money market without strong oversight.
Giles focused on why stablecoins have not become popular in the UK. He said there is still no clear legal framework, so people hesitate to treat them as real money.
According to Giles, most current stablecoin use is to move money in and out of crypto. He described them as mainly “on- and off-ramps” for digital assets that are “not massively interesting or going to take over the world".
When asked whether stablecoins should pay interest, he said it depends on their purpose. If they are only a way to send money, then there is “no need to pay interest".
White House officials recently met with crypto and banking groups to discuss stablecoin yields and the CLARITY Act. What did they say? Read the full story.
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