Bank of England Clarifies Temporary Stablecoin Restrictions
Deputy Governor Sarah Breeden of the Bank of England has clarified that the proposed limits on stablecoin holdings are temporary. Speaking at DC Fintech Week, Breeden addressed industry concerns over the central bank’s plan to cap individual stablecoin holdings.
The proposed limits, ranging from £10,000 to £20,000 per person and up to £10 million per business, aim to mitigate financial stability risks. Critics fear these restrictions could hinder the UK’s goal of becoming a global digital asset hub. However, Breeden assured that the measures are designed to support stablecoins in retail and wholesale payments.
These temporary caps will allow the financial system to adjust to stablecoins gradually. “We want to monitor stablecoin adoption and assess potential rapid changes in the financial system,” Breeden explained. The limits will be removed once the transition no longer threatens real-economy financing.
Regulating the dynamic stablecoin market is challenging, but the Bank of England is working on a “fit for the future” regulatory regime. A consultation is expected by the end of 2025 to gather feedback on the proposed limits and implementation approaches.
Bank of England Governor Andrew Bailey, known for his crypto skepticism, has warned that unregulated stablecoins could threaten the nature of money. The central bank aims to balance innovation with financial stability.
