Stablecoin Limits in UK Set to Be Temporary Says BoE Deputy

Stablecoin Limits in UK Set to Be Temporary Says BoE Deputy

Stablecoin Limits in UK Set to Be Temporary Says BoE Deputy

Bank of England Deputy Governor Sarah Breeden has clarified that the central bank’s plan to restrict stablecoin holdings and transaction size will only be a temporary measure to ensure stability in the financial system.

The proposed limits on stablecoins were first floated in a November 2023 discussion paper as a means to ensure financial stability. As plans progressed, industry groups lashed out in September, arguing that it would stifle innovation and limit growth. 

However, in a speech at DC Fintech Week on Wednesday, Breeden said the limits were intended only as a temporary stopgap, which will be removed as the bank ultimately wants to “support a role for stablecoins as part of a multi-money system.” 

Breeden said the measures will allow the “structure of real-economy financing to adjust” to stablecoins and ensure the bank can “monitor adoption of stablecoins and assess the potential for rapid changes in the structure of the financial system.” 

“So let me be clear. We would expect to remove the limits once we see that the transition no longer threatens the provision of finance to the real economy.” 

Industry groups widely criticized the proposed limits, previously floated to be between $13,429 and $26,858 (10,000 and 20,000 British pounds), arguing it would also signal to the wider industry that the UK isn’t a crypto-friendly jurisdiction and drive away businesses. 

Source: Ryan Adams 

Stablecoin rules are not set in stone yet 

Breeden said the BOE is launching a consultation before the end of the year, asking for feedback on the limit levels and a path for implementation.

“We will be consulting in coming weeks on the detail of our proposed regime for sterling stablecoins used in systemic payment systems, and we’ll be open to feedback as we finalize our rules,” she said.