England’s central bank is easing its stablecoin restrictions following pushback from the cryptocurrency industry.
The Bank of England (BOE) announced Monday (June 22) that it would not introduce the temporary holding limits on stablecoins it had been considering. Instead, the bank will apply a “temporary issuance guardrail” to “each systemic stablecoin,” initially set at 40 billion pounds.
“This is a major milestone in delivering greater choice and innovation in UK payments. Innovation thrives on trust,” Sarah Breeden, the bank’s deputy governor for financial stability, said in a news release.
“And today we’ve set out the foundations of that trust for a new form of money – with prompt redemption, strong protections and central bank support. This is truly a world leading regime.”
In addition to the 40 billion pound limit, the BOE has increased the maximum share of stablecoins allowed to be held in interest‑bearing assets from 60% to 70%, with the rest in central bank deposits.
“These deposits enable issuers to meet redemptions promptly. The change supports more viable business models while still allowing issuers to deal with outflows,” the BOE said.
Read more: pymnts.com
