Bank of England to Reconsider Stablecoin Restrictions

• Bank of England is considering easing its rules for stablecoins following criticism from the crypto industry.
• The regulator may abandon proposed limits on holdings of British stablecoins.
• The central bank is also reviewing its requirement that 40% of stablecoin reserves be held at the Bank of England.
• Officials acknowledged that the original proposals may have been “too conservative.”

Bank of England is reassessing its planned stablecoin restrictions after pressure from representatives of the cryptocurrency industry. This was stated by Deputy Governor for Financial Stability Sarah Breeden in an interview with Financial Times.

According to Breeden, the regulator is “very carefully” examining alternative mechanisms for managing risks associated with the growing use of stablecoins. She also acknowledged that the Bank of England’s earlier proposals may have been “too conservative.”

Previously, the central bank proposed temporary limits on holdings of British stablecoins — up to £20,000 per token for individuals and up to £10 million for companies. The regulator argued that the measure was intended to prevent large-scale deposit outflows from the banking system.

The Bank of England stated that industry participants consider such a mechanism operationally complex. As a result, the regulator is prepared to explore alternative ways to achieve its objectives.

Bank of England May Also Ease Reserve Requirements

In addition, Bank of England may soften its reserve requirements for assets backing stablecoins.

Under the original proposal, issuers would have been required to hold at least 40% of reserves in non-interest-bearing deposits at the central bank. The remaining reserves could be invested in government bonds and other liquid assets.

Representatives of the crypto industry criticized the requirement as overly restrictive compared to regulations in the United States. In their view, the policy could make issuing British stablecoins less profitable and weaken the United Kingdom’s competitive position in the global digital asset market.

Breeden noted that the reserve requirement was based on lessons learned from previous banking crises. At the same time, she confirmed that the regulator would reassess its overall approach to liquidity and risk management.

It is worth recalling that in November 2025, the Bank of England introduced stablecoin regulations and allowed certain exemptions from the proposed limits.

See also: "Tomorrow Could Determine the Fate of Cryptocurrencies: Here’s What You Need to Know"

#Stablecoins #Bank of England

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