The Bank of England may soften its approach to stablecoin regulation after industry criticism of proposed holding limits.
Speaking at a House of Lords Financial Services Regulation Committee hearing on Wednesday, Deputy Governor Sarah Breeden said the central bank is open to alternative measures to manage financial stability risks tied to potential shifts from bank deposits to stablecoins.
The BOE had proposed temporary caps of £20,000 for individuals and £10 million for businesses, but officials are now reviewing feedback from the industry as part of the ongoing consultation process.
The proposed stablecoin framework would allow systemic issuers to hold deposit accounts at the BOE, with reserves split between short-term UK gilts and central bank deposits.
The bank also plans to provide policy clarity on how tokenized collateral could function under UK EMIR rules and to expand the Digital Securities Sandbox to include regulated stablecoins for wholesale settlement testing.
