Bank of England set to ease sterling stablecoin rules amid industry concerns: FT
Deputy Governor Sarah Breeden said the central bank is "looking very hard" at re-examining its proposed stablecoin rules.
The Bank of England is preparing to soften its proposed regulatory framework for sterling-backed stablecoins following significant pushback from the cryptocurrency industry. Deputy Governor Sarah Breeden told the Financial Times that the central bank is "looking very hard" at re-examining its draft rules, which were initially published earlier this year as part of the UK's broader effort to regulate digital assets.
The original proposals faced criticism from industry participants who argued the requirements were overly restrictive and could stifle innovation in the UK's digital asset sector. The draft regulations covered various aspects of stablecoin operations, including capital requirements, operational standards, and consumer protection measures. Industry groups and companies had raised concerns that the stringent rules could drive stablecoin issuers to more accommodating jurisdictions.
The potential relaxation of these rules could provide relief to cryptocurrency firms seeking to operate sterling stablecoins in the UK market. A more flexible regulatory approach might encourage greater adoption of pound-denominated stablecoins and support London's ambitions to remain competitive as a global financial technology hub. The move also reflects the Bank of England's willingness to engage with industry feedback while balancing innovation with financial stability concerns.
The central bank is expected to publish updated guidance following its review, though no specific timeline has been announced for when the revised framework will be released.
Source: The Block
