UK Reconsiders Sterling Stablecoin Rules Amid Industry Pushback

The Bank of England (BoE) is reviewing its proposed framework for sterling stablecoins after industry feedback highlighted concerns about scalability and operational feasibility.

In November, the BoE launched a consultation on a framework that would cap individual holdings at £20,000 ($27,000) and business holdings at £10 million ($13.5 million), with issuers required to hold at least 40% of reserves at the BoE without earning interest.

Deputy Governor Sarah Breeden acknowledged that industry feedback raised concerns about the holding limit design, stating that 'the way we have proposed to implement limits is cumbersome operationally for a temporary measure.'

The BoE is also reviewing the 40% reserve requirement, with industry participants preferring to hold more interest-earning assets.