Bitget App
Trade smarter
Buy cryptoMarketsTradeFuturesEarnSquareMore
Bank of England Supports Tokenized Deposits to Mitigate Stablecoin Threats

Bank of England Supports Tokenized Deposits to Mitigate Stablecoin Threats

Bitget-RWA2025/09/27 09:17
By:Coin World

- UK banks including HSBC and Barclays launch tokenized deposit pilot to modernize financial infrastructure via blockchain, supported by UK Finance and the Bank of England. - Bank of England Governor Andrew Bailey prioritizes tokenized deposits over stablecoins, citing systemic risks from unregulated digital currencies and emphasizing banking system stability. - PunkStrategy's tokenized NFT model saw $21M valuation surge by linking trading fees to CryptoPunk NFTs, but analysts warn of speculative risks ami

Bank of England Supports Tokenized Deposits to Mitigate Stablecoin Threats image 0

British banks are rapidly moving forward with the use of tokenized deposits, reflecting a wider shift toward blockchain-driven financial solutions. A group of leading banks—including

, , , , , and Nationwide—has introduced a pilot project to digitize customer deposits, utilizing blockchain to issue digital versions of the pound. Led by UK Finance and backed by the Bank of England, this project seeks to streamline payments, minimize fraud, and upgrade the country’s financial systems. The trial will continue through mid-2026, exploring use cases in online commerce, mortgage refinancing, and digital asset transactions Whale Scores $2.1M as PunkStrategy NFT Token Hits $70M Valuation [ 5 ].

Bank of England Governor Andrew Bailey has consistently supported tokenized deposits over stablecoins, which he considers a risk to financial stability. In July 2025, Bailey argued that tokenized deposits add real value by ensuring payments remain within regulated banks, in contrast to stablecoins, which he criticized for lacking strong branding and for their potential to disrupt established finance Next Up, NFTStrategy [ 6 ]. The UK’s experiment is part of a global divergence in regulation, with the United States under the Trump administration taking a more relaxed approach to stablecoins. This difference underscores the ongoing debate about how to foster innovation while managing systemic risks in digital finance.

The UK’s efforts to advance tokenized deposits coincide with a boom in tokenized asset initiatives, including new crypto-NFT hybrid concepts. One notable case is PunkStrategy (PNKSTR), a tokenized NFT project experiencing swift expansion. PunkStrategy’s model allocates 10% of trading fees to acquire and resell CryptoPunk NFTs, using the profits to repurchase and burn PNKSTR tokens. This cycle is designed to help stabilize the token’s value and increase NFT demand. In late September 2025, PNKSTR’s market cap jumped from $1 million to over $21 million in just a week, with a single large investor seeing an unrealized profit of $2.1 million.

Although the project’s innovative approach has drawn interest, experts warn that its speculative design brings considerable risk. The NFT sector’s typical volatility and lack of liquidity could lead to sharp price movements, especially if major holders sell off their tokens. Moreover, PunkStrategy’s viability relies on ongoing trading and the overall strength of the NFT market. Other ventures, such as TokenWorks’ NFTStrategy tokens for Bored Apes and Moonbirds, are also appearing, aiming to build self-sustaining economic cycles around top NFT collections.

The UK’s tokenized deposit initiative and the emergence of NFT-related tokens signal a broader move toward programmable money and asset digitization. By turning traditional financial assets into digital form, institutions hope to cut costs, improve transparency, and open up new possibilities. Nevertheless, obstacles such as unclear regulations, liquidity issues, and the need for solid infrastructure remain. The Bank of England’s emphasis on tokenized deposits rather than stablecoins highlights its intent to retain oversight of monetary systems, while projects like PunkStrategy showcase the experimental side of tokenomics.

As the UK’s pilot unfolds, its results may shape international regulatory standards and influence investor attitudes toward tokenized assets. For now, the balance between institutional involvement and speculative innovation demonstrates the evolving and sometimes precarious nature of financial tokenization.

0

Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

PoolX: Earn new token airdrops
Lock your assets and earn 10%+ APR
Lock now!

You may also like

Dogecoin News Today: Dogecoin ETF Breakthrough: Transitioning from Internet Meme to a Mainstream Investment Option

- Bitwise's DOGE ETF (BWOW) launches Nov 26, 2025, offering regulated DOGE exposure with 0.34% fee. - Dogecoin ranks 9th at $22B market cap, with $1B+ daily volume, driven by institutional adoption and SEC approval shifts. - ETF structure holds actual DOGE, aligning with Bitwise CEO's vision to democratize crypto access through transparency. - Grayscale's Zcash ETF filing and Mutuum Finance's $19M presale highlight growing altcoin institutional interest. - DOGE trades at $0.1503, consolidating in $0.13–$0.

Bitget-RWA2025/11/30 15:32
Dogecoin News Today: Dogecoin ETF Breakthrough: Transitioning from Internet Meme to a Mainstream Investment Option

Regulation and Innovation: SEC Examines Nasdaq’s Proposal for Tokenized Stocks

- Nasdaq seeks SEC approval for tokenized stock trading framework, aiming to modernize settlement while aligning with existing regulations. - The proposal shares CUSIPs and rights between tokenized/traditional shares but faces criticism over potential market fragmentation and investor protection risks. - SEC's cautious approach and December 4 panel will determine if tokenized equities gain regulatory traction or remain niche experiments. - Industry divides persist: Nasdaq prioritizes incremental adoption w

Bitget-RWA2025/11/30 15:32
Regulation and Innovation: SEC Examines Nasdaq’s Proposal for Tokenized Stocks

XRP News Today: Investors Divided: XRP's $5 Buzz Compared to Ozak AI's 7,000% Growth Promise

- XRP gains traction as analysts predict $5 price targets via ETF-driven inflows, citing historical Bitcoin multipliers. - Ozak AI emerges as AI-focused crypto alternative, raising $4.54M in presale with 7,000% return potential via decentralized AI infrastructure. - Market splits between XRP's institutional appeal and Ozak AI's utility-driven innovation, highlighting crypto's shifting risk-reward dynamics. - Analysts note XRP's capped growth vs. Ozak AI's 50X-100X potential, emphasizing real-world AI appli

Bitget-RWA2025/11/30 15:16

Between Breakthroughs and Turmoil: The Struggle for Safety and Longevity in Cryptocurrency

- Crypto sector faces structural challenges balancing innovation with security and sustainability amid rising threats and regulatory uncertainty. - Mutuum Finance advances dual-lending architecture and mtToken mechanics under Halborn audit to build defensible DeFi models. - Upbit's $36M hack and Tether's Uruguay exit highlight systemic vulnerabilities from cyberattacks and energy cost volatility. - Industry shifts toward sustainable yield models with automated collateral rules and revenue redistribution to

Bitget-RWA2025/11/30 15:16
Between Breakthroughs and Turmoil: The Struggle for Safety and Longevity in Cryptocurrency