The Bank of England has announced its intention to review and relax previously proposed restrictions on the storage of stablecoins in banks. This signifies a shift in the approach to regulating digital assets in response to active criticism from market participants and increasing competition from the United States.
This is reported by Business • Media
Regulatory Plans and Market Reaction
The regulator is considering the possibility of reducing the limits on the amounts of stablecoins that banks can hold on their balance sheets. Additionally, the Bank of England plans to allow the use of these digital assets in a special experimental “sandbox for digital securities.” This approach aims to stimulate financial innovation and test new solutions in the field of payments and settlements.
The previous strict stance was articulated by the bank’s governor, Andrew Bailey, who emphasized the potential risks to the stability of the monetary system. It was proposed to limit the storage of stablecoins to £20,000 for individuals and £10 million for companies. However, these measures faced significant opposition from representatives of the digital financial sector, who called for a review of such rules.
“Market participants insisted on a review of these measures.”
International Competition and Prospects for London
Experts note that the change in the Bank of England’s policy is related to the active development of the stablecoin market in the United States, where a more flexible regulatory framework is in place, particularly due to the GENIUS Act. Analysts warn that maintaining strict restrictions could lead to a drain of liquidity, investments, and professionals to other countries.
The use of stablecoins in the “sandbox for digital securities” will allow banks and financial companies to test new ways of applying them, particularly in transactions involving assets tied to various currencies. This could lay the groundwork for developing a long-term strategy for regulating digital assets in the United Kingdom.
Analysts are confident that easing the approach to stablecoins will strengthen London’s position as one of the leading centers for financial technology development. Furthermore, this will contribute to increasing the speed of payments and reducing transaction costs.
It was previously reported that the United Kingdom and the United States plan to establish a joint working group to develop regulatory standards in the field of digital assets. The Bank of England is expected to publish updated consultations on stablecoins by the end of 2025.