The Bank of England is preparing changes in the regulation of stablecoins, which include the introduction of temporary limits on the storage of digital assets.
This is reported by Business • Media
Temporary Restrictions for Users and Businesses
The United Kingdom is considering setting limits on the amounts of stablecoins that individuals and companies can hold. According to preliminary information, private individuals are expected to be allowed to hold up to £20,000, while businesses will be allowed up to £10 million. It is anticipated that the regulatory documents will also specify certain exceptions to allow for flexible responses to specific situations.
The development of the new regulatory regime is being handled by the Bank of England, and its representatives emphasize the importance of gradually implementing these rules. Deputy Governor of the Bank of England Sarah Breeden noted that the country is moving in a direction that aligns with the pace of the United States while maintaining a leading position in shaping policy regarding stablecoins. She stressed that the established limits are temporary.
“Breeden also pointed out the differences between the credit systems of the United States and the United Kingdom. In the U.S., a significant portion of mortgages is financed through the securities market, whereas in the United Kingdom, it is through commercial banks. This, according to Breeden, compels British regulators to act more cautiously.”
Expected Changes and Further Steps by the Regulator
One of the key reasons for introducing limits is concerns about the potential impact of stablecoins on the mortgage market in the United Kingdom. The regulator aims to ensure financial stability and avoid risks that may arise from the widespread use of such digital assets.
According to preliminary plans, the Bank of England is expected to complete the development of the regulatory framework by the end of 2025. The new rules will likely include requirements for asset backing and transparency in the operations of stablecoin issuers.
Previously, the Governor of the Bank of England Andrew Bailey and the Chair of the Financial Stability Board called on G20 countries to strengthen oversight of stablecoins to enhance the protection of financial systems.