Bank of England Adopts Open Stance on Stablecoins for Wholesale Payments

According to Odaily, the Bank of England has expressed a forward-looking position on digital innovation this week. Executive Director Sasha Mills stated an open attitude towards the use of stablecoins for wholesale payments, contrasting with the Bank for International Settlements' recent report labeling stablecoins as 'unreliable currencies.' Mills emphasized that financial stability remains a priority, but after legal revisions, the central bank must balance innovation with regulation. The policy marks a significant shift as the Bank of England loosens its stance on using stablecoins in wholesale markets, although it still favors central bank currency settlements. In the retail sector, the bank plans to relax reserve requirements, allowing some investment in high-quality assets. Additionally, it proposes temporary holding limits for individuals and businesses to prevent deposit outflows. This comes after a warning from the Bank of England's governor about stablecoins posing a threat to public trust in currency.