Bank of England softens stablecoin rules in final framework
The central bank dropped individual holding limits and set a temporary £40 billion cap as it tries to support innovation without weakening bank credit.
- On Monday, the Bank of England published draft rules for systemic stablecoins, replacing proposed individual holding caps with a temporary £40 billion issuance guardrail to encourage adoption.
- BoE Deputy Governor Sarah Breeden signaled the policy shift in May after digital asset firms warned that restrictive holding limits would hinder competitiveness against dollar-backed stablecoin rivals.
- Under the new policy, systemic stablecoin issuers may hold up to 70% of reserves in interest-bearing government debt, increasing from the previously proposed 60% threshold.
- ClearBank CEO Mark Fairless called the shift away from complex holding limits "a positive step," though he cautioned that further progress on backing requirements is needed.
- The Bank aims to finalize the rulebook by the end of 2026 for a planned 2027 rollout, while non-systemic tokens remain under the Financial Conduct Authority's supervision.
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Cointelegraph
The New York LedgerBank of England Publishes Stablecoin Rules, Targets 2027 Launch
The Bank of England unveiled draft stablecoin rules that ease reserve requirements and replace proposed holding limits as the UK prepares for a 2027 launch.
Bank of England softens stablecoin rules in final framework
The Bank of England relaxed some of its proposed rules on stablecoins in its final policy and draft rules on Monday, responding to widespread concern they could hinder the development of the nascent sterling-backed market.
Stablecoins could become a regular tool to pay in shops, shop online, or send money to individuals in the UK if the new regulatory approach presented by the Bank of England (BoE) prospers. The draft published on Monday sets out a framework that seeks to encourage the daily use of these digital currencies linked to stable assets, while preventing them from becoming substitutes for traditional bank deposits.
The Bank of England has changed the rules for the issuance of "est ves" cryptocurrencies to attract more issuers to the market and promote their use with companies and families. The new regulation, still under discussion, brings the United Kingdom closer to the United States.
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