US, UK Unite on Stablecoin Rules with £40 Billion Issuance Cap

The US and UK have taken steps to align their stablecoin regulations, with both countries backing one-for-one reserve requirements for payment stablecoins.

Regulators from both nations met in London on July 8 for the 13th session of the Financial Regulatory Working Group, which included representatives from the Bank of England, Federal Reserve, SEC, CFTC, FDIC, and OCC. The meeting focused on refining regulations concerning digital assets, with a particular emphasis on stablecoins.

The Bank of England relaxed draft rules for stablecoin issuers by removing user holding limits and introducing a temporary systemic issuance cap of £40 billion per year. Additionally, the bank reduced central bank non-interest deposit requirements from 40% to 30%, allowing for more flexibility in reserve management.