Bank of England reconsiders strict stablecoin regime
BoE weighs easing UK stablecoin caps and reserve demands after industry backlash, in a move that could decide whether GBP tokens can compete with dollar‑pegged rivals.
The Bank of England (BoE) is reconsidering parts of its proposed regime for pound sterling stablecoins after digital asset companies warned that holding caps and reserve requirements could stifle adoption and make UK-issued tokens uneconomic.
The central bank is looking at alternatives to temporary caps on how many stablecoins individuals and businesses can hold, and is examining whether its requirement that at least 40% of backing assets be held as non-interest-bearing deposits at the BoE is overly conservative, Deputy Governor Sarah Breeden told the Financial Times.
The rethink comes as the UK government and regulators try to position Britain as a competitive hub for digital assets while containing risks to bank funding and financial stability. Sterling-pegged tokens currently make up a tiny fraction of the roughly $300 billion global stablecoin market, which remains dominated by dollar-based issuers.