Today in crypto, Bank of England governor sounds the alarm on stablecoins, thousands of savers face potential losses after a $2.7 million shortfall was discovered at Ziglu, and a British crypto fintech that entered special administration, Bitcoin retail interest is lagging despite the asset reaching new all-time highs.
Bank of England governor sounds alarm on stablecoins
Bank of England (BOE) governor Andrew Bailey issued a warning on Sunday against banks issuing stablecoins and said the BOE should adopt tokenized deposits instead.
Bailey said that stablecoins threaten the fabric of the financial system and could cause governments to lose control of their fiat currencies.
The BOE official added that the UK central bank should not join the European Union in pushing for a central bank digital currency (CBDC) or issuing a “digital pound.”
Bailey’s concerns have been voiced by other EU officials, who argue that US dollar stablecoins could upend the financial system or cause further damage to the euro in global currency markets.
Collapsed crypto firm Ziglu faces $2.7M deficit amid special administration
Thousands of savers face the grim prospect of losing their investments after administrators uncovered a 2 million pounds ($2.7 million) shortfall at Ziglu, a British cryptocurrency fintech that collapsed earlier this year.
The company, which suspended withdrawals in May, was placed into special administration last week amid mounting concerns over its financial management, according to a Sunday report from The Telegraph.
Ziglu attracted around 20,000 customers with promises of high-interest returns, particularly through its “Boost” product, which offered yields up to 6%. Launched in 2021 during a period of low interest rates, Boost became popular due to its higher returns.
However, the product was not protected or ring-fenced, allowing the company to use customer funds for day-to-day operations and lending activities. Following the Financial Conduct Authority’s (FCA) intervention in May, withdrawals were frozen, leaving savers locked out of their money for weeks.
Bitcoin retail interest ‘almost nowhere to be found’ as BTC taps highs
Bitcoin has reached consecutive record highs this week, yet retail investors seem reluctant to jump back into the market, according to a crypto researcher.
However, demand for spot Bitcoin exchange-traded funds (ETFs) is surging, with Thursday and Friday recording daily inflows of over $1 billion, the first time this has happened on two consecutive days.
Bitwise head of research André Dragosch said in an X post on Friday, “Bitcoin is at new all-time highs but retail is almost nowhere to be found,” pointing to the lack of Google search interest in “Bitcoin” despite the asset setting consecutive all-time highs this week.
