The United States has now decisively rejected a government-issued digital dollar. Instead, it has chosen to empower the private sector to lead the development of stablecoins backed by the dollar—cemented through the recent passage of the GENIUS and CLARITY
Acts.
This is more than a monetary policy decision; it is a deliberate geopolitical strategy. By enabling the proliferation of dollar-backed stablecoins in digital wallets, cross-border payment systems, and institutional markets, the U.S. is building a new layer
of infrastructure—one that projects American influence not through central bank control, but through programmable code and global integration.
In contrast, the United Kingdom remains caught in consultation mode. The Bank of England has spent years exploring a digital pound that may not materialise before the 2030s. The Treasury has yet to commit to a concrete path. Now, there are growing rumours
that the Bank may drop its CBDC project altogether and instead pivot to support a regulated stablecoin ecosystem—mirroring the U.S. model.
Either course could be valid. What is no longer tenable is indecision.
As President Franklin D. Roosevelt once said: “The best decision is the right one. The next best is the wrong one. The worst is no decision at all.” In the context of global digital currency competition, Britain risks falling into that final category,
paralysed by process while others move with purpose.
The rest of the world is not waiting. Stablecoins are already embedded in the infrastructure of global commerce. In the 12 months to May 2025, adjusted on-chain stablecoin transaction volume reached $20.2 trillion—a 46 percent year-on-year increase. Leading
issuers such as Tether and Circle now account for more than $220 billion in aggregate market capitalisation. These are not speculative assets; they are widely used for payments, remittances, inflation hedging, and offshore settlement.
In Argentina, dollar stablecoins are used to denominate prices and wages. In Nigeria, usage surged by over 250 percent last year. In Turkey, they dominate crypto trading volumes. This is not hypothetical. It is the financial infrastructure of the present.
Meanwhile, pound-backed stablecoins remain marginal. Earlier attempts—such as BGBP and GBPT—failed due to regulatory uncertainty, limited integration, and low market demand. The absence of a coherent UK framework has allowed the dollar to dominate the rails
of digital finance by default.
Sterling still enjoys credibility as a global currency, supported by strong institutions, deep capital markets, and the enduring influence of the City of London. But that relevance is eroding. The pound now represents just 4.9 percent of global reserves
and less than 13 percent of FX trading volumes. If that trend continues, the UK risks losing not only economic clout but geopolitical leverage.
The solution is not to copy the American approach wholesale, but to take a cue from its clarity. The UK should enable private-sector issuance of pound-backed stablecoins under a regulatory regime that ensures reserve transparency, interoperability with Bank
of England systems, and robust financial safeguards.
There are clear use cases. Pound stablecoins could cut transaction costs for UK exporters and financial institutions trading with emerging markets. They could support fintech platforms serving diaspora remittance corridors. They could enhance demand for
sterling-denominated sovereign debt. And they could catalyse innovation in programmable finance—from conditional bond payments to targeted welfare disbursements.
There is also a wider strategic imperative. China is already exporting its digital yuan infrastructure as part of its Belt and Road Initiative. The BRICS bloc is building alternatives to the Western-led financial system through CBDC cooperation. If liberal
democracies want to remain competitive, they must provide viable alternatives grounded in openness, transparency, and the rule of law.
There are green shoots. In June 2025, BCP Technologies launched tGBP—the first FCA-regulated, fully reserved pound stablecoin. It’s a promising step. But one issuer does not make an ecosystem. Real momentum will require regulatory clarity, institutional
participation, and incentives for adoption across sectors.
The Starmer government has a rare window of opportunity. With a strong electoral mandate and a stated ambition to lead in technology and financial innovation, the UK can still define its role in the next chapter of global finance.
But it must act—decisively and soon. In the digital currency arms race between the dollar and the yuan, the pound must not be a spectator. Whether through a central bank digital currency or a robust stablecoin ecosystem, Britain needs to make a strategic
choice—and follow it through with the urgency this moment demands.
