3rd October 2025 > > Bailey, the ECB, & Arthur Hayes.
- Mark Timmis
- Oct 3
- 4 min read
tl;dr
Andrew Bailey, Governor of the Bank of England, has really let himself down this time, along with the ECB. Arthur Hayes does what Arthur Hayes does.
Market Snap
Market Wrap
$2.25bn of inflows to the spot BTC ETFs in just four days is a tremendous run. ETH spot ETFs have seen over $1bn of inflows in those same four days. Brace yourself for new ATHs, and a clear blue sky run to the psychologically important target of $150k. Happy days!
Curious Cryptos’ meme corner
h/t The Milk Road
Occasional Series – The Torygraph
In rather unfortunate timing, The Torygraph ran a piece a few days ago openly antagonistic towards cryptos titled “The crypto bros at risk of losing everything” in which the author makes plain that they have done little to no research before putting pen to paper.
No surprise to anyone then that BTC is up $7k since publication.
Curious Cryptos’ Commentary – The UK’s stablecoin revolution
Or not, but let’s take a look anyway.
The UK’s attitude towards cryptos is neatly summed up by that Torygraph article – antagonistic, woefully inadequate (think Alan Partridge levels of inadequacy), with a deep-seated fear that permeates the entire technocratic class that they are about to be found out, and that their cushy jobs-for-life settlement could be at risk. After all, someone must pay the train drivers their six-figure salaries for ever less work (what exactly is wrong with automation?), whilst taxing public sector employees simply shuffles the same money from one pocket to another.
The FT ran an article authored by the hapless Andrew Bailey, Governor of the Bank of England, with the headline “The new stablecoin regime”.
Woah, I hear you shout.
But don’t panic, it’s all OK. I have not abandoned my principles by subscribing to the FT.
I am not a supporter of its entrenched illiberalism, its disdain of cryptos, nor its unique shtick of pretending to appeal to a target audience that deems its musings distrustful and dangerous. I have access because of my online Revolut account, and I am stuck with it, as Revolut refused to swap my FT subscription for something far more valuable instead, such as an annual gift of a plastic spoon, broken or otherwise.
…
Bailey’s piece is confusing to read, which comes as no surprise to anyone who has ever listened to him speak.
At first glance, he appears to be welcoming to the stablecoin revolution:
“It would therefore be wrong to be against stablecoins as a matter of principle.”
But that statement does not preclude being against stablecoins as a matter of prejudice, which he has in spades when it comes to cryptos.
Bailey references the fractional reserve banking system, but his description does not fill one with confidence that he understands what that term means. His claim that commercial bank money is made up of the loan assets supplied to individuals and companies is just wrong. Commercial bank money comprises the deposits made by us, leveraged to make loans, as encouraged by banking rules and regulations. Those loans create money that the receiver can spend, but for commercial banks, those loans are no more than entries on a centralised ledger. They are not money from a bank perspective, not until they are repaid.
Given his previous tenure as Chair of the FCA, whose culture and expertise he deliberately destroyed in a one-man mission to turn that previously semi-effective bureaucracy into a vast one whose only interest was in expanding its workforce ever further, Bailey should be expected to understand the rules he was supposedly enforcing.
…
Bailey gives the game away with this comment:
“To be clear, my focus here is on stablecoins being used at scale for payments and settlement in the real economy, which matters for stability. In contrast, their main use today — as a way to enter and exit cryptocurrency markets — does not meet, or (sic) need (sic) to meet, this definition of money.”
Bailey is either very ignorant (a strong possibility I grant you considering his poor grasp of basic grammar) or is being deliberately misleading.
Stablecoins are a form of cryptocurrency – the means of entering and exiting the crypto markets is the same means of entering and exiting the stock markets. That is, by using fiat. We must ponder why Bailey would make such a fundamental error, an error deliberately placed deep at the heart of his article.
I think there can only one conclusion, if we do grant him the luxury of not being totally incompetent, a tough call though that may be.
Bailey is trying to conflate stablecoins with CBDCs, a conflation that sits very well with the editorial policy of the upper echelons of the FT. This would also fit with the view of all our politicians. CBDCs appeal to the controlling instincts that are frequently on display amongst our technocratic elite, to be used as an instrument of coercion that brutal dictators of the past could only ever dream about.
Shame on him.
…
In one narrow sense we should be grateful for his incompetence. European Central Bank Executive Board member Piero Cipollone made this chilling statement at a Bloomberg event on Tuesday:
“The middle of 2029 could be a fair assessment (for the launch of a Euro CBDC).”
Be afraid, be very afraid.
If you have any income streams personal or business in Euros, make sure you have procedures in place to immediately remove funds from any European banking institution, and swap that income into dollar stablecoins. If you have assets personal or business located in the Euro area, think long and hard as to whether that is really a sensible position to find yourself in come 2029.
Which interestingly is the same conclusion Arthur Hayes comes to, but from a different perspective, and in a much shorter timescale.
Curious Cryptos’ Commentary – Arthur Hayes
Did you see his essay this week?
The essence of it is compelling, but even I baulk at how hard he goes on some topics. Worth a read, boys and girls, worth a read, so long as you are not of a sensitive disposition:
Comments