Bank of England hints at softer approach to stablecoin restrictions

The Bank of England is signaling a potential softening of its stance on stablecoin regulation, particularly regarding proposed holding limits, after receiving criticism from the industry. Deputy Governor Sarah Breeden indicated during a House of Lords hearing that the central bank is open to alternative measures to mitigate financial stability risks associated with shifts from traditional bank deposits to stablecoins. Previously, the BOE had proposed temporary caps of £20,000 for individuals and £10 million for businesses. As part of the ongoing consultation, the bank is reviewing this industry feedback. Furthermore, the proposed stablecoin framework would permit systemic issuers to hold deposit accounts at the BOE, with reserves divided between short-term UK gilts and central bank deposits. The BOE also intends to clarify policy on tokenized collateral under UK EMIR rules and extend the Digital Securities Sandbox for wholesale settlement testing involving regulated stablecoins.

(Source：Crypto Briefing)