The Bank of England may reduce proposed limits on stablecoin holdings and backing asset requirements to boost UK competitiveness.
The Bank of England plans to ease proposed restrictions on stablecoin holdings following criticism from the digital asset industry. Initial proposals included a £20,000 ($27,000) cap per individual and a 40% requirement for backing assets to be deposited with the central bank, earning no interest.
Industry participants argued the rules were overly conservative and could hinder the UK’s competitiveness in the digital economy. The BOE is reviewing alternatives to manage risks while supporting innovation in stablecoins, which are cryptocurrencies pegged to traditional assets like the US dollar.
Sarah Breeden, deputy governor for financial stability, acknowledged the initial plans may have been too restrictive and said the central bank is exploring adjustments.