The Bank of England is preparing significant changes to its policy on stablecoins, intending to relax existing restrictions on their storage and provide more opportunities for the development of digital financial innovations.
This is reported by Finway
Regulatory Changes and Response to Industry Criticism
The financial regulator of the United Kingdom is considering options to lower the limits on the volumes of stablecoins that banks can hold on their balance sheets. It is also planned to allow the use of stablecoins in a special “sandbox for digital securities,” where experimentation with new financial products and technologies is possible. This decision is a response to criticism from market participants who pointed out the excessive rigidity of the previously proposed rules.
Previously, the Bank of England, under the leadership of Andrew Bailey, insisted on establishing strict limits: up to £20,000 for individuals and up to £10 million for companies. Representatives of the digital industry have called for a review of these restrictions, arguing that they hinder innovation and could lead to a potential capital outflow to countries with more favorable regulatory environments.
“The easing of the stance is related to increasing competition from the U.S., where a more favorable regulatory framework for stablecoins exists, including the GENIUS Act, experts believe.”
Strategic Prospects for Digital Finance
Analysts predict that the Bank of England will publish an updated consultation on stablecoins by the end of 2025. The use of these digital assets in the “sandbox” will allow banks to test settlements with assets pegged to both the pound sterling and other currencies. This will help shape a long-term strategy for regulating digital finance in the United Kingdom.
Market representatives emphasize the potential of stablecoins to accelerate financial transactions and reduce transaction costs. Easing regulatory requirements could strengthen London’s position as one of the global centers for digital financial technologies and innovations. It is noted that the United Kingdom, together with the U.S., plans to create a working group on the regulation of digital assets, further highlighting the strategic importance of this topic for both countries.