Bank of England Eases Stablecoin Rules

Bank of England Considers Softer Stablecoin Regulations

• The Bank of England is reconsidering its approach to stablecoin regulation following industry feedback on proposed holding limits.
• Deputy Governor Sarah Breeden indicated openness to alternative measures for managing financial stability risks related to stablecoins.
• Initial proposals included temporary caps of £20,000 for individuals and £10 million for businesses.
• The proposed framework would allow systemic issuers to hold deposit accounts at the BOE, with reserves in short-term UK gilts and central bank deposits.
• The BOE plans to clarify policy on tokenized collateral under UK EMIR rules and expand the Digital Securities Sandbox for regulated stablecoins testing.

The Bank of England is reviewing industry feedback on its stablecoin regulation proposals, which include temporary holding caps. The central bank aims to manage financial stability risks while considering alternative regulatory measures.