UK Scraps Stablecoin Caps, Eases Reserve Rules for BoE
The UK's stance on stablecoins has undergone a significant shift in recent times. The Bank of England (BoE) was given a new legal duty by the UK Treasury to support innovation in payments and digital finance, with annual reporting requirements. This move marks a change from the BoE's previous cautious approach to stablecoins.
Regulators have removed per-user caps on stablecoin issuance, replaced them with a £40 billion total limit. Additionally, reserve rules have been eased, allowing issuers to hold more interest-bearing assets in their reserves.
The changes are aimed at promoting innovation and adoption of cryptocurrencies in the UK. According to City minister Lucy Rigby, the goal is to balance both sides - stability and innovation - with a focus on supporting new financial technologies.