UK central bank relaxes proposed limits on sterling stablecoins, allowing £40bn total issuance per provider after industry feedback.
The Bank of England has revised its draft rules for sterling stablecoins, replacing individual holding restrictions with a £40bn cap on total issuance per provider. The move follows concerns that earlier proposals could stifle market growth in the nascent sector.
Under the updated framework, stablecoin issuers can now allocate up to 70% of backing assets to short-term government debt, up from 60%. The remaining 30% must be held in non-interest-bearing deposits at the central bank. The UK currently lacks comprehensive stablecoin regulation, unlike the EU’s MiCA framework.
The BoE aims to foster innovation in retail payments while maintaining financial stability. The revised rules mark a shift toward a more flexible approach as the UK seeks to position itself as a hub for digital asset development.