Bank of England may ease £10 million stablecoin cap for firms
The Bank of England (BOE) is reportedly reconsidering its proposed caps on corporate stablecoin holdings after facing industry opposition and growing competition from other countries.
According to a Bloomberg report, the BOE plans to introduce exemptions allowing certain firms to hold larger reserves of fiat-backed stablecoins.
The original proposal set limits at 20,000 pounds for individuals and 10 million pounds for companies to address systemic risks associated with tokens like USDT and USDC.
The BOE’s intention behind these caps was to maintain control over the money supply, protect consumers, and prevent excessive reliance on private digital currencies.
However, concerns have been raised by crypto-native companies that such limits could restrict their operational needs for liquidity and trading.
Simon Jennings of the UK Cryptoasset Business Council argued the proposed restrictions “simply don’t work in practice,” highlighting challenges for industry stakeholders.
BOE Governor Andrew Bailey had previously expressed worries that private stablecoins might undermine monetary policy and financial stability.
Yet, he recently adopted a more open stance, recognising stablecoins as potential innovations within the broader financial ecosystem.
This shift reflects the UK’s effort to balance regulation and competitiveness as the global stablecoin market surpasses $314 billion, dominated by US dollar-pegged tokens.
In contrast, UK-linked pound-pegged stablecoins account for only a negligible share, estimated at under $1 million in circulation.
Reeve Collins, co-founder of Tether, predicted at the Token2049 conference that all fiat currencies could exist as stablecoins by 2030, supporting broader adoption due to ease of use and compatibility with tokenised assets.
The BOE’s evolving approach signals recognition of the need to adapt policies amid rapid market developments and international regulatory progress, particularly as the US advances with clearer stablecoin regulations under the GENIUS Act signed into law in July.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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