Bank of England to Ease Stablecoin Holding Caps
SkimNews Take
The Bank of England's initial strict stablecoin proposals, now being softened, reveal a regulatory tension between managing perceived financial risks and fostering innovation in a competitive global digital economy.
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- Bank of England says it will ease its proposed stablecoin restrictions after industry pushback.
- Sarah Breeden, deputy governor for financial stability, called the £20,000 per‑coin holding cap “overly conservative”.
- Bank of England is ready to lower the rule that at least 40% of stablecoin‑backing assets be held at the central bank with no interest, and 60% invested in short‑term UK government debt.
- Coinbase (via head of policy Europe Katie Haries) warned that a cap on stablecoin holdings would hinder UK digital‑economy competitiveness and innovation.
Why it matters: Crypto firms gain flexibility to hold more interest‑earning assets, while the BOE eases the 40% non‑interest deposit rule, reducing the cost of stablecoin backing and helping the UK stay competitive in the digital economy.
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