Bank of England Plans Temporary Limits on Stablecoin Holdings

According to PANews, the Bank of England has announced plans to lift proposed restrictions on the amount of stablecoins individuals and businesses can hold once digital assets no longer pose a threat to the economy. Deputy Governor Sarah Breeden highlighted concerns that rapid adoption of stablecoins could lead to a significant outflow of bank deposits, potentially hindering credit flow to businesses and households. To address this, the Bank of England is considering temporary measures to limit the holdings of systemic stablecoins, as well as their overall size and transaction volume. These restrictions will be removed once it is determined that they no longer threaten the financing of the real economy. Previously, experts expressed concerns that such limitations could impede the adoption of stablecoins pegged to the British pound. Breeden's recent statements indicate a softening of the Bank's policy stance. She also mentioned that if initial regulations are too lenient and stablecoin usage surges, adjustments to the rules may be necessary. Large companies may be exempt from holding more stablecoins if needed. Breeden dismissed criticisms that the UK is lagging in the stablecoin sector, stating that the country plans to conduct consultations later this year and finalize a regulatory framework next year, aligning with the United States' objectives.