The Bank of England (BoE) has softened its stance on stablecoin holding restrictions in the UK, following industry criticism, according to the FT.
In the new consultation paper, the BoE has deemed its new approach “necessarily forward-looking,” outlining its response to industry feedback on the proposed regulatory regime for sterling-denominated systemic stablecoins.
Under the new rules, retailers and crypto exchanges will be exempt from the £10 million business holding limit.
“We are designing a regulatory regime for stablecoins that is fit for the future. Our focus is on possible future use in real world payments and settlements, not their current use to buy and sell cryptoassets,” said Andrew Bailey, Bank of England Governor.
“Use of regulated stablecoins could lead to faster, cheaper retail and wholesale payments, with greater functionality, both at home and across borders.”
The previous proposal would have limited individuals to between £10,000 and £20,000 ($13,600-$27,200) and businesses to around £10 million ($13.6 million).
While individual caps remain, business holdings are to be expanded. The central bank is also considering offering central bank liquidity facilities to systemic stablecoin issuers during periods of market stress, providing a backstop if they are unable to sell their reserve assets in the private market.
The Bank has clarified that individuals will be limited to owning up to £20,000 of UK stablecoins deemed systemically important, while most businesses will be limited to holding up to £10 million.
For more detail on the BoE’s stance on UK stablecoin use, read CaPio’s piece on Bank of England Governor Andrew Bailey here.
