UK regulators outline stablecoin backing rules, raising interest-bearing asset limit to 70% to balance innovation and financial stability.
The Bank of England published draft rules for systemic stablecoin issuers, aiming to foster safe innovation in digital payments. The framework allows stablecoins to operate as trusted digital money while ensuring resilience and consumer confidence in the £40 billion UK market.
Key revisions include raising the maximum share of interest-bearing assets, such as short-term UK government debt, from 60% to 70%. The remaining 30% must be held in central bank deposits to ensure prompt redemptions. The changes follow industry feedback and aim to support viable business models.
The BoE and Financial Conduct Authority will finalize the regime, including a transition path for firms scaling from non-systemic to systemic status. Further details will be released alongside the FCA’s final rules.