UK Central Bank Eases Stablecoin Rules Following Market Response

The Bank of England (BOE) has eased its proposed stablecoin rules in response to market feedback, aiming to foster growth and innovation in the sector. The central bank’s final policy and draft rules, announced on Monday, scrap earlier plans to cap individual holdings. Instead, the BOE now limits total issuance per stablecoin to $52.8 billion.

Deputy Governor for Financial Stability Sarah Breeden called the update a “major milestone in delivering greater choice and innovation in UK payments.” The revised guardrails allow systemic stablecoin firms to operate viably, supporting daily volumes and transactions comparable to other payment systems.

The BOE also adjusted reserve requirements, increasing the share of backing assets held in short-term government debt from 60% to 70%. The remainder must be held in non-interest-bearing central bank deposits. Breeden emphasized that the new rules build trust by ensuring quick redemptions, strong consumer protections, and central bank backing.

Despite the relaxation, the BOE warned that widespread stablecoin adoption could reduce bank deposits and affect lending and borrowing costs. A Ripple survey found 72% of institutions believe offering stablecoins is key to remaining competitive.

Source: https://cryptopotato.com/uk-central-bank-eases-stablecoin-rules-following-market-response/