UK House of Lords Calls for Balanced Stablecoin Regulation
- A House of Lords committee warns the UK is “lagging behind” the US and EU in stablecoin regulation.
- The report suggests that strict rules could undermine the viability of UK-issued stablecoins.
- It supports a requirement for fiat-referenced stablecoins to be backed by high-quality assets at a ratio of 1:1.
- Concerns were raised about a proposed rule mandating systemic issuers to hold at least 40% of backing assets in unremunerated central bank deposits.
- The committee also cautioned against temporary holding limits for businesses and individuals which could hinder GBP stablecoin growth.
The House of Lords emphasizes the need for a regulatory framework that fosters innovation while ensuring financial stability, highlighting risks associated with stringent reserve requirements and interest bans on coinholders. The goal is to create a competitive environment for stablecoins in the UK market.
With concerns over potential regulations impacting competitiveness, the report stresses that proper calibration is essential to support GBP stablecoins in competing effectively within the payment landscape. (Source)
