BOE weighs alternatives to stablecoin holding limits following industry pushback
Bank of England Considers Changes to Stablecoin Regulations
LONDON, May 19 (Reuters) - The Bank of England said on Tuesday it is weighing alternatives to holding limits on stablecoins and will publish draft rules next month.
Temporary Guardrails and Industry Impact
• "Temporary guardrails" on total stablecoins issued could address concerns about impact on credit provision at lower cost to the sector than holding limits, Deputy Governor Sarah Breeden said at CityWeek 2026.
Previous Proposals and Industry Backlash
• The BoE had previously said it would cap holding limits at 20,000 pounds ($26,786) per individual and 10 million pounds per business for sterling stablecoins that are widely used for everyday payments, prompting a backlash from industry.
What Are Stablecoins?
• Stablecoins are typically pegged at a fixed rate to the U.S. dollar or another major currency, and aim to be an alternative to the existing banking system for making domestic or international payments.
Financial Stability Concerns
• The BoE has voiced concern that a rapid outflow of bank deposits into stablecoins risked endangering financial stability and could cause a credit crunch.
Industry Response and Global Context
• The cryptoasset industry has said the BoE's proposals are among the strictest in the world.
Next Steps and Implementation Timeline
• The BoE will publish draft rules next month and finalise them by year-end "in line with the U.S. timeline," Breeden said.
Bank-Issued Stablecoins
• Banks can issue stablecoins so long as they are issued from a non-deposit-taking entity using distinct branding that can "reference" the parent brand, she said.
Exchange Rate Information
($1 = 0.7467 pounds)
Reporting and Editing
(Reporting by Phoebe Seers. Editing by Mark Potter)
