Lawmakers asked if stablecoins could drain bank deposits and threaten financial stability, while Coinbase and Innovate Finance warned that strict regulation risks driving innovation offshore.
The United Kingdom House of Lords grilled Coinbase’s top international policy executive on Wednesday over whether stablecoins would drain bank deposits and add new risks to the UK financial system, pressing him on everything from Silicon Valley Bank‑style runs to illicit finance and Know Your Customer (KYC) rules.
During the Lords’ stablecoins inquiry, Tom Duff Gordon, Coinbase’s vice president for international policy, insisted that fully reserved, regulated stablecoins were “safer than uninsured bank deposits” because they are backed one‑to‑one by cash and high‑quality government securities and can be redeemed at par.
He argued that stablecoins could materially reduce payment costs, speed up cross‑border payments, and underpin new artificial intelligence driven “agentic” payment flows.
